Dispatches from a Small Business

Spam Call of the Day

BIG RED FLAG: There are many scam artists out there who take your business information and then treat it like a "buy" order for advertising and bill later. Beware people calling saying they are just trying to "update your listing." I have also had folks who actually cut and pasted recordings of my phone calls to paste my answers to questions that have not been asked.

Me: What city are you representing?C: we're localM: Local where?C: hereM: I have 200 locations across the country, what local area are you representing?C: we're worldwide -- everywhere.M: CLICK (me hanging up)

Wow, telemarketing scripts by Kafka. Unbelievably, they called again 10 seconds later

M: HelloC: We represent PhoenixM: OK, Phoenix. I don't have any operations in Phoenix, just my HQ. I don't want to be listed in PhoenixC: You are already listedM: Well that explains why I get calls at my accounting office looking for a camping space. Please remove me.C: Can I have your name pleaseM: No you may not. You said I had an account already. You should know my name CLICK

Incredibly, my new favorite Indian pitbull telemarketer calls again

M: HelloC: blah, blah, something, blah blah.M: Look, please take this down. I do not want a yellow pages listing in Phoenix. I would like my Yellow Pages listing removed in Phoenix. I do not want to pay you any money. I do not want to give you any information. I do not want you to call me any more. CLICK

Clintons: Welcome to 1905

Bill Clinton is at least honest to some extent in saying that cutting back on CO2 emissions will requires us to throttle back the economy:

In a long, and interesting speech, he [Bill Clinton] characterized what
the U.S. and other industrialized nations need to do to combat global
warming this way: "We just have to slow down our economy and cut back
our greenhouse gas emissions 'cause we have to save the planet for our
grandchildren."

But how much? Activists try to make the average person feel like the amount is "not much" by spinning out rosy stories of 3rd graders fighting global warming by recycling. But in fact Bill's wife Hillary makes the degree of cuts clearer:

...[Clinton's] plan would reduce greenhouse gas emissions by 80 percent from 1990 levels by 2050 to avoid the worst effects of global warming...

And recognize, this is the typical figure being cited by global warming catastrophists for "necessary" US cuts. So how much is 80%? With current technology, an almost unimaginable cut. Its hard to get good Co2 data, but here is a chart from some place called the Carbon Dioxide Information Analysis Center that purports to show US historic CO2 production from man-made sources:The chartsmanship sucks here, but 1990 looks like about 1.35 billion metric tons. 20% of that would be 0.27 billion metric tons. That appears to be the level we hit in about ... 1905. So, apparently without using nuclear power (since Clinton opposed nuclear expansion in one of the debates, I think in Nevada) she wants us in the next 42 years to get back to the energy production of about 1905. Now this is a bit unfair, since efficiencies and GDP per ton of CO2 have improved substantially since 1905. So to be fair she may only want to take us back to about 1930.

While this is scary, what Clinton and other global warming crusaders want to do to the third world is even scarier. Right now, close to a billion people who have been in poverty forever are posed, via growth in China, India, and SE Asia, to finally exit poverty. Global warming crusaders want this to stop. For example, here is the former World Bank chief economist Nicholas Stern says that India must stay poor:

Mr
Stern, the former chief economist of the World Bank, sends out a very
clear message: “We need to cut down the total amount of carbon
emissions by half by 2050.” At current levels, the per capita global
emissions stand at 7 tonnes, or a total of 40-45 gigatonnes. At this
rate, global temperatures could rise by 2.5-3 degrees by then. But to
reduce the per capita emissions by half in 2050, most countries would
have to be carbon neutral. For instance, the US currently has, at 20-25
tonnes, per capita emissions levels that are three times the global
average.

The European Union’s emission levels stand at 10-15
tonnes per capita. China is at about 3-4 tonnes per capita and India,
at 1 tonne per capita, is the only large-sized economy that is below
the desired carbon emission levels of 2050. “India should keep it that way and insist that the rich countries pay their share of the burden in reducing emissions,” says Mr Stern.

The Productive Worker Exodus

Well, Arizona nativists are getting what they wanted: Productive workers who don't happen to have been licensed by the government to work here are leaving in droves (via Disloyal Opposition)

Unable to find jobs, or fearful that their loved ones will be caught
and deported, illegal immigrants and their legal friends and relatives
are fleeing the state in what the press has dubbed "Hispanic panic." In
a state where illegals make up better than 10% of the workforce,
the exodus promises to have a major impact. The vacancy rate in
Tucson-area apartment complexes favored by illegal immigrants has
jumped dramatically since the law went into effect....

Of course, advocates of the sanctions law will say that this is exactly the result they were hoping for; they want Hispanics to flee the state (usually, they'll claim that they just want the illegal
ones to leave). But with workers leaving Arizona, taking their rent
money, mortgage payments and shopping dollars with them, and with state
employers facing rising labor costs -- if they can even find workers --
the economy is likely to take a major hit. In fact, the University of
Arizona predicts a $29 billion economic loss if illegal workers are successfully purged from the state (full report here in PDF).

Wild West Mentality

On the night of July 29, 2007, Dibor Roberts,
a Senegalese-born American citizen living in Cottonwood, Arizona, was
driving home from her job as a nurse's aide at an assisted living
center located in the Village of Oak Creek, an unincorporated community
near Sedona. Along Beaverhead Flat Road, an unlit, unpopulated route
through the desert, she suddenly saw flashing lights in her rearview
mirror. Fearful of stopping on a deserted stretch of pavement,
especially in light of reports she'd heard of criminals impersonating police,
she decided to proceed to a populated area before stopping the car, the
nearest such area being Cornville, an unincorporated settlement along
the road to Cottonwood. She slowed her car to acknowledge the flashing
lights and continued to drive. Her decision wasn't especially unusual
-- in fact, it's recommended by some police departments....

On Cornville Road, well before the populated area, Sheriff's
Sergeant Jeff Neunum apparently tired of waiting for Roberts to reach a
settled area. While he was, in fact, a police officer, he now proceeded
to justify every fear an American may have about rogue cops. He raced
his cruiser in front of Roberts's car, forcing her off the road. He
then smashed her driver's-side window with his baton and grabbed a
cellphone she was using to check his identity. Accounts vary at this
point. While police deny it, the press has reported that Neunum dragged
Roberts from her vehicle, threw her to the ground, and handcuffed her
while driving his knee into her back.

All of this because she was going 15 miles over the speed limit on a deserted rural road.

The Consumers are Saved!

I could probably start a blog just featuring ridiculous government licensing practices. As I have written before, licensing generally has little to do with the consumer, and more to do with protecting current incumbents from competition. Via Radley Balko, this is one of the uglier examples I have seen of late:

Mary Jo Pletz was really, really good at eBay. But now the former
stay-at-home mother and gonzo Internet retailer fears a maximum $10
million fine for selling 10,000 toys, antiques, videos, sports
memorabilia, books, tools and infant clothes on eBay without an
auctioneer's license.

An official from the Department of State knocked on Pletz's
white-brick ranch here north of Allentown in late December 2006 and
said her Internet business, D&J Virtual Consignment, was being
investigated for violating state laws....

The 33-year-old opened her Internet business in 2004 so she could
stay home with her 6-month-old daughter, Julia, who was diagnosed with
a hypothalamic hamartoma brain tumor.

She cooperated when told it was illegal and works at dental offices
in Allentown, Bethlehem and Lehighton as a hygienist to help pay the
bills at home. Julia, whose health stabilized on medication, is
enrolled in day care. Pletz also has a son, Douglas, 7.

But the state has not dropped prosecution. It sent Pletz a complaint in
April and an amended complaint in December. The complaint says she
could be fined $1,000 for each violation of the state law. The April
complaint noted 10,000 sales. Pletz and her attorney, Joseph V. Sebelin
Jr. of Palmerton, did the math - $10 million in possible fines. The
second complaint does not list a number....

Because of the complaint, Pletz worries the state also could revoke
her dental hygienist's license, which she earned by attending community
college for seven years at night.

"I really wish that they will walk away from that one and prosecute
somebody else," said State Rep. Michael Sturla (D., Lancaster), who is
chairman of the House Professional Licensure Committee. "There is every
reason in the world that if she is found guilty, she should be
exonerated," he said.

This latter is the most outrageous of all, and it is a line taken by a number of public officials -- that the concept of prosecuting people who are selling things on eBay is just fine, but they should not have started with someone who has less sympathetic. Maybe Exxon has an eBay arm.

Sturla has proposed the bill to create the electronic auctioneer's
license. The license would require the Internet seller to buy a $5,000
bond for about $40 a year. This would protect consumers, he said.

Bull. This would protect competitors. eBay has numerous controls in place to identify problem sellers.

I can say from experience that for some reason they must teach this in
government school -- when in doubt, make service businesses get a
bond.

This is not unique - Ohio tried to do the same thing. But why is a person who sells on eBay an auctioneer at all? Isn't eBay the auctioneer? If I turn my stuff over to Christies to auction off, setting a reserve price in advance and having them take a sales commission, how is that any different than putting the same stuff on eBay. In Ms. Pletz case, eBay is earning the auction commission. She is just taking a retail margin.

The New Micro-Fascism

Get ready, because global warming will soon be an excuse for government micro-management of any number of everyday behaviors. We have already seen California's attempt to have the government take control of your home thermostat. In England, the target is patio heaters:

Britain’s growing café culture and taste for alfresco drinking and
dining may be under threat from MEPs who want to ban the patio heater.

A
vote in Brussels today is expected to call on the European Commission
to abolish the heaters to help to tackle climate change. Such a move
could cost the pub and catering trade dear.

Pubs spent about £85
million on patio heaters after the smoking ban was introduced last
year. Besides forcing smokers into the cold there is concern that a ban
on patio heaters could bring a significant cash loss to pubs, cafés and
restaurants.

By the way, something not mentioned in the article, perhaps because it takes a knowledge of actual science and stuff, is that these heaters tend to burn LPG and propane, which due to their molecular structure produce far less CO2 per BTU than other fossil fuels.

One is left to wonder what pareto-style ranking of CO2 reduction opportunities put patio heaters at the top of the list. In fact, there is no possible rational analysis that would make this a legislative priority. It is a great illustration of two points about such technocratic endeavors:

Government cannot correct supposed market irrationalities because governments always act more irrational than private players in the market, no matter who is in charge.

Most legislation supposedly to fight global warming is using global warming as a fig leaf to hide the actual reason for the legislation. My guess in this case is that the sponsors of this legislation have some other reason for wanting the ban, but dress it up as global warming. This mirrors the larger issues, there socialists, unrepentant Ehrlich admirers, and anti-globalization loonies have repackaged themselves as fighting global warming and then, surprise, proposed the same government actions they were pushing for pre-global-warming-hysteria.

The desperate schools of Montgomery County will need to find some way
[to] stretch the $15,246 they have to spend on each of the 137,745 students
in their schools.

This is simply hilarious. Sometimes it is hard to compare per-pupil spending on an apples to apples basis since each grade tends to be progressively more expensive than the last (high school is more expensive than middle school which is more expensive than elementary school). Recognize that this is only partially because the education per se is more expensive at each step -- it is more because the expectation of extra-curriculars (sports, theater, etc.) go up at each level.

However, taking 8th grade as a mean, I can say that my 8th-grader's tuition in a for-profit private school that receives no donations or outside scholarship money is less than half $15,246. And the education he gets is generally considered the best in the city (though his school is lighter than some rich-suburb public school on extra-curriculars).

If you have any doubt that local media generally act as cheerleaders for increased public spending, look no further than this. Note the newspaper quote (from the Washington Post) and then Schaeffer's context:

I have saved the most touching story for last . . .

In Loudoun County, School Board members approved a
budget 14 percent higher than last year’s to accommodate an expected
3,000 new students. The county faces a projected $250 million
shortfall, and the 54,000 student system will probably have to look for
new places for savings.

My heart goes out to the Loudoun County administrators. I can’t see
how anyone can be expected to educate a child with just $15,000 or to
cover a 6 percent enrollment increase with just a 14 percent increase
in the budget.

The New Stadium Lie

This week, we in Phoenix are supposedly getting our payoff for subsidizing the hapless Arizona Cardinals with a billion dollar football stadium that is used for its intended purpose (football games) for 33 hours per year (3 hours per game times 11 games: 2 Cardinals pre-season, 8 home regular season, Fiesta Bowl). In exchange we get a nicer stadium (if I were to want to see a Cardinals game live) but worse TV options (because instead of the best game of the week, we have to see our home team).

The big selling point, the cherry on top of the sundae the NFL uses to push new stadiums, is a Superbowl. Which is in town this week. So far, the huge economic stimulus has not really poured into our household, but I guess I need to be patient. Anyway, the timing seems good to link this article, which comes via the Sports Economist:

If you build it, they will come. This is usually the mantra of those in
favor of publicly financed sports stadiums, including the current
proposal for a new soccer stadium in Chester. In this case they
are visitors whose spending would turn devastated cities and
neighborhoods into exciting destination points. Local schools,
merchants, and residents all would benefit as municipal coffers swelled.

There's only one problem with this scenario. It's not true. Never has been. They
do come, but cities are not saved. Over the past two decades, academic
research has generated literally hundreds of articles and books
empirically challenging the alleged economic wonders of new stadiums,
even when they're part of larger development schemes. I have been
studying and writing about publicly financed stadiums for more than 10
years and cannot name a single stadium project that has delivered on
its original grandiose economic promises, although they do bring
benefits to team owners, sports leagues and sometimes players....

Why, then, given the overwhelming academic research challenging
stadium-centered economic development do political leaders (if not
average citizens) still support such projects? In a just-released
article in the Journal of Sport and Social Issues, my colleagues and I
studied media coverage of 23 publicly financed stadium initiatives in
16 different cities, including Philadelphia. We found that the
mainstream media in most of these cities is noticeably biased toward
supporting publicly financed stadiums, which has a significant impact
on the initiatives' success.

This bias usually takes the form of uncritically parroting stadium
proponents' economic and social promises, quoting stadium supporters
far more frequently than stadium opponents, overlooking the numerous
objective academic studies on the topic, and failing to independently
examine the multitude of failed stadium-centered promises throughout
the country, especially those in oft-cited "success cities" such as
Denver and Cleveland.

I can attest to the latter. During the run up to various stadium-related referenda, the media was quite rah-rah for the stadium subsidies. In fact, on radio, several talk show hosts denigrated voters who opposed the stadium subsidies as "stupid old retired people." I remember calling in to a couple of talk shows opposing the stadium bills and being treated like a Luddite.

Mostly, this series just makes me sad and tired, the same way
I’d be sad and tired if I saw smart verbal well educated people
spending their time explaining that, no, Jews don’t have horns, and
it’s a bad idea to drown your neighbors to see if they are witches.

The sheer wasted effort combating idiocy and ignorance, when
these talented people could be doing so much more, if not for the
resting levels of stupidity and ignorance cloaked with self-righteous
anger that permeate the population.

The only proviso I would add is that for those of our political class, I suspect the ignorance may be more willful than actual, since a clear understanding of economics in the general populace might stand in the way of gaining personal power. I expressed related sentiments here:

Economics is a science. Willful ignorance or emotional
rejection of the well-known precepts of this science is at least as bad
as a fundamentalist Christian's willful ignorance of evolution science
(for which the Left so often criticizes their opposition). In
fact, economic ignorance is much worse, since most people can come to
perfectly valid conclusions about most public policy issues with a
flawed knowledge of the origin of the species but no one can with a
flawed understanding of economics.

Does Anyone Have A Feeling For Numbers Anymore?

The Boston Globe, in its usual blundering math-challenged media way, blithely published an editorial the other day that included this hilarious "fact"

Since June, Israel has limited its exports to Gaza to nine basic
materials. Out of 9,000 commodities (including foodstuffs) that were
entering Gaza before the siege began two years ago, only 20 commodities
have been permitted entry since. Although Gaza daily requires 680,000
tons of flour to feed its population, Israel had cut this to 90 tons
per day by November 2007, a reduction of 99 percent. Not surprisingly,
there has been a sharp increase in the prices of foodstuffs.

OK, the Gaza has over a million residents, but do these 1.4 million people really require 1.36 million pounds of flour a day?? I find that hard to believe, and amazing that no editor even asked the question, much less checked.

Update: Did a search. Found this. The Palestinian ministry puts consumption around 350 tons per day. That makes a bit more sense. Congratulations on missing the number by over 3 orders of magnitude. You can bet they are doing a lot of quality fact-checking on those global warming estimates too.

Update 2: I agree with the commenter that the number they should have used was something like 680,000 pounds rather than tons. I would have written it off as a typo, transposing tons for pounds, but the math was based on it being tons, not pounds, so it is not just a typo issue.

Feed Your Gambling Habit

I am all for full legalization of gambling, but, at the risk of preaching at you, if you are betting one of the following Superbowl prop bets with any kind of cash, you might have a gambling problem. Here are several examples from Sports Book Review:

What song will Tom Petty open with?Petty is this year’s halftime entertainment in
Glendale; FOX advertised this fact during previous NFL games using
“Runnin' Down a Dream” off the 1989 album Full Moon Fever. That’s a
strong indicator the song will at least be part of what will be a short
set, although a medley like the one Prince performed last year is
certainly possible.

“Runnin' Down a Dream” is the favorite at +110, followed by the 1977 classic “American Girl” at +175.

Color of liquid winning head coach is doused in?
Football lore has it that Bill Parcells got the first Gatorade shower
in 1985, courtesy of Jim Burt and Harry Carson, when the Giants beat
the Washington Redskins
17-3 during a midseason game. The Gatorade was orange (+200), as it was
when Parcells took a bath after winning Super Bowl XXI. But Bill
Belichick was doused in a clear liquid (+300) after winning Super Bowl
XXXIX over the Eagles.

Halftime commercial to have highest rating
Budweiser is the big favorite at –180, followed by godaddy.com at +275.
Last year’s winner was a commercial by Hewlett-Packard; the Bud Light
ads didn’t even crack the Top 3. So Anheuser-Busch has reportedly taken
out nine (!) Super Bowl ads this year; Bud should be the value pick
here by sheer volume alone.

Length of National AnthemAmerican Idol winner Jordin Sparks will sing the
Star-Spangled Banner at Super Bowl XLII, presumably because FOX is the
television host for both programs. The over/under for this prop is
103.5 seconds. Sparks took about 102 seconds to complete the anthem at
Game 1 of the 2007 NBA Finals between the San Antonio Spurs and the Cleveland Cavaliers.

Here are a few others I found at this site, with all the prop bets you could ever wish for:

We must be a secular society - God's fallen to third. I always wanted to see someone from the losing side get interviewed right after the winner thanked God for their win. Wouldn't you just love the losing player to say "Well, you heard it. God was against us. What chance did we have?"

An Environmental Plea

If the word "environmentalist" wasn't so corrupted, I would consider myself to be one. For years, the main charity I have supported with my money and my advocacy has been private land trusts like The Nature Conservancy. Just because I don't think that governments should quash individual rights to force people not to develop their own land does not mean that I don't think certain pieces of land are worth protecting from development. But I do it the old-fashioned way -- I and others spend money to buy that land. Here is more on why I (mostly) like groups like the Nature Conservancy and here is a post wherein I lament the shift in charity from spending your money to achieve goals to spending money to lobby the government to force other people to achieve your goals.

Of course, my claim to be an environmentalist just because I, you know, spend my money and time on private conservation efforts would be laughed off because I take the wrong stand on certain litmus test environmental issues (e.g. global warming, of course). In this world, someone who buys a silly and environmentally worthless $19.99 carbon offset has more environmental street-cred than I do.

The government's bid to make fuel consumption more environmentally
friendly will involve petrol and diesel being mandatory blended with
2.5pc biofuel from this April and the country's leading supermarket
chain is aiming to use twice this amount at over 300 of its petrol
stations.

But campaigners believe this is not the green alternative people think they are getting.

Jenn
Parkhouse from Norwich Friends of the Earth said: “From April, people
will have no choice but to contribute to the destruction of forests,
the eviction of small farmers and rising food prices which will mean
more hunger.

“More and more people now realise the need for a
strong movement to stop the destruction caused by the biofuel industry
and the legislation which encourages it.”

When Government Intervenes in Bargaining

A lot of conservatives have an incredible loathing for unions. Which is one of the reasons why I differ from them as a libertarian. In a free society, any group of people, including workers at a company, should be able to associate to achieve certain goals, including to increase their bargaining power in wage negotiations. As I said here:

If a group of even two people want to get together at GM and call
themselves a "union" and approach management to negotiate, they should
be able to have at it. In a free society, this is how things should work -- any
number of employees should be able to organize themselves. If they get
enough people, then they will have enough clout, perhaps, to be
listened to by management.

Here is where the problem comes in, though. Over history, governments have intervened to increase the power of unions vs. the companies they work for. Some of the early legislation was fine from an individual rights perspective - e.g. "companies can't hire thugs to beat the crap out of workers to get them to come back to work." However, over time, the government has passed laws to increase the bargaining power of unions artificially and to increase their power in general (e.g. to violate workers association rights by forcing them to join a pre-existing union or to at least pay union dues as a pre-condition to work in certain companies or industries). In some states we have come nearly full cirle, to the point that it is almost impossible to prevent unions from using violence in strikes, for example against people crossing picket lines.

So when I see studies like this one, I don't see it as an indictment of unions per se, since unions exist in "right to work" states, but rather an indictment of government intervention trying to ham-handedly balance bargaining. Here is the interesting chart, from a study by Arthur Laffer:

Michigan in particular has made itself downright hostile to employers. Given that the official government position is that "we aim to tilt the bargaining power against you in your negotiations with your largest suppliers," it is a wonder any business locates there.

Aren't These the Same?

I saw these twoposts one after the other on Q&O. One is about Chavez's food regulations in Venezuela, the other is about a government health care plan in California. One is about government takeover of a critical industry, price controls, supply rationing, and demonizing large private corporations, and the other is about the same thing, but in Venezuela. Since Chavez is further along with his program, we might see how things are working out for him:

Venezuela’s top food company has accused troops of illegally seizing
more than 500 tonnes of food from its trucks as part of President Hugo
Chavez’s campaign to stem shortages.

The leftist Chavez this
week created a state food distributor and loosened some price controls,
seeking to end months of shortages for staples like milk and eggs that
have caused long lines and upset his supporters in the OPEC nation.

The
highly publicised campaign has also included government crackdowns on
accused smuggling, with the military seizing 1,600 tonnes of food and
sending 1,200 troops to the border with Colombia....

"Anyone
who is distributing food ... and is speculating, we must intervene and
we must expropriate (the business) and put it in the hands of the state
and the communities," Chavez said during the inauguration of a new
state-run market in Caracas.

Yep, sounds about the same. Fortunately, people in the West can still travel across borders to get health care when government rationed and price-controlled services are not available, as many Canadians and British do. So in the US, when we implement all these same steps, we'll be able to travel to..., travel to... Where will we be able to go?

I Love Maps

I have always loved maps. As a kid, I could spend hours looking through an Atlas. And, even better, my dad had this huge book in his office that had a collection of US maps by county, showing all kinds of crazy demographic and economic information. I loved that book. Since then, I have never found it on sale any where, but this map is a good example of the kind of thing it used to include. Via strange maps, it is a map of leading religions by county. The map also has a clever way of showing where the plurality is a majority.

New Grisham Novel

I have not been able to read a Grisham lawyer novel since "the Runaway Jury," which was an absolutely amazing ode to the joys of jury tampering. Seldom does one see an author treat so many abuses of due process and individual rights so lovingly, all because it is OK to take away a defendant's right to a fair trial as long as the defendant is an out-of-favor corporation. (On the other hand, Grisham's "the Painted House," about growing up on a small cotton farm in the south, is wonderful).

Grisham's biases in the Runaway Jury become clearer to me now that I now he pals with Dickie Scruggs, notorious Mississippi tort lawyer who is soon to be sharing a cell next to Jeff Skilling, that is unless they can delay his investigation until Jon Edwards is attorney general.

With what might seem like startlingly bad timing, Scruggs chum/novelist (and campaign donation co-bundler,
if that's the right term) John Grisham is just out with a new fiction
entitled The Appeal, whose thesis, to judge by Janet Maslin's oddly favorable review in the Times,
is that the real problem with the Mississippi judicial system is that
salt-of-the-earth plaintiff's lawyers are hopelessly outgunned in the
task of trying to get friendly figures elected to judgeships to sustain
the large jury verdicts they win. One wonders whether any of Maslin's
editors warned her about recent news events -- she doesn't seem aware
of them -- that suggest that the direst immediate problems of the
Mississippi judiciary might not relate to populist plaintiff's lawyers'
being unfairly shut out of influence. Of course it's possible she's not
accurately conveying the moral of Grisham's book, and if so I'm not
likely to be the first to find out about it, since I've never succeeded
in reading more than a few pages of that popular author's work. By the
way, if you're wondering which character in the novel Grisham presents
as the "hothead with a massive ego who hated to lose,” yep, it's the
out-of-state defendant.

The UN Joke Just Continues

In the 17 months since [the UN Human Rights Council's] inception, the body has passed 13 condemnations, 12 of them against Israel.

LOL. I'm not a huge Israel fan (its socialist to a stupid degree and maintains what are effectively two-tiers of individual rights, for its Jewish and Arab residents) but this is absurd. Apparently the Council has the same problems as the human rights commission it replaced:

The problems begin with the council's composition. Only 25 of its 47
members are classified as "free democracies," according to Freedom
House's ranking of civil liberties. Nine are classified as "not free."
Four -- China, Cuba, Russia and Saudi Arabia -- are ranked as the
"worst of the worst." These nations are responsible for repeated
violations of the U.N.'s own Universal Declaration of Human Rights. Yet
it is they who dominate the council, leading a powerful bloc of
predominantly Arab and African nations that consistently vote as a unit.

Thanks, Trial Lawyers

Because of the all-to-prevalent theory (which may become even more common if Jon Edwards becomes our next AG) that every accident must be the fault of the nearest person with deep pockets, I wasted an hour today.

I visited the NFL experience today with my son. The NFLX is a kind of football-themed fair or amusement park that the NFL sets up near the site of each Superbowl (HA HA NFL -- I said it. I said "Superbowl" and not "the big game." Come and get me). After waiting in a reasonable line to enter, we found that to play the games (e.g. throw the football through a hoop) every participant (read 10,000+ people) had to individually fill out and sign a liability waiver and get a wristband attesting to the fact. There were about 16 clerks at work, but it still was about an hour-long wait.

It struck me that the NFL could have come up with a much better process. Why not have people with Internet access (about everyone, since almost 98% seemed to be there with tickets they bought on the internet) print out the waiver and bring it with them already filled out? The manager on-site claimed that Arizona state law and the Arizona AG required that the process proceed the way it did. I give that explanation about a 50-50 between being correct and just covering their butt for something stupid.

Anyway, once signed, we had a good time at the event, and it was well worth the effort.

Save It

The Arizona Republic this morning had some goofy headline in their print edition that said something like "How should you spend your $800 tax rebate?" Far be it for me to presume to tell people how to spend their own money (what do I look like, a Congressman?) but here is a bit of advice: Save it. Because this is not a grant, it is a loan.

All of these rebates will be paid for with additional deficit spending. This means that everyone will eventually pay for their rebate in the form of a) higher future taxes; b) higher future prices due to inflation; or c) increased job insecurity and/or lower future earnings due to reduced output in the economy; or d) all of the above.

It HAS to be this way. Unlike private wealth creation, the government can't get wealth from nowhere.

Looming Problems at Fannie Mae

Maxed Out Mamma tells us that Fannie Mae may already have huge subprime exposure (emphasis added):

Maybe most voters believe
that FNMA and FHA are just in the conservative loan business.
HAHAHAHAHAHAHAHA. Certainly no "trained journalist" is going to ask any
questions about this topic.

Both Fannie and FHA will go to DTIs of over 60% in some cases. Especially refis. Try this thread on FHA.
If only I had saved down the 100 odd links or so I've run into over the
last year about how brokers were getting loans that the subprime
companies refused (who have since defaulted) through under FNMA!!! The
reason they did it as a last resort was only because FNMA paid less for
the loan. FNMA is already going to run into huge problems because of
the slopover into their portfolio in the interim between most of the
subprime lenders going down and FNMA's meaningful tightening of lending
standards. So FNMA already faces years of worsening financial trouble
without any new risks. Why does OFHEO oppose this? Hmmmm?

You can get information on Fannie's loan types at efanniemae.com. Believe me, they do high LTV, hybrids, 40 year etc. This page will show you information about Fannie's ARM products. Take a look. Take a good look. You want a 100% interest-only? They got it!! In fact, they'll take downpayment assistance, and go up to 105% with special programs. Chortle! Ya want interest-only ARM hybrids with DAP? Sure. BRING IT ON, cries Fannie. Simultaneous seconds? Sure 'nuff!!! (By the way, this is the escape from the refusal of the MI companies to play.)

The
bottom line is that every risk afflicting Alt-A lenders in high-cost
areas can afflict Fannie and really has. It's just that no one is
paying attention.

Prosecutorial Abuse

Tom Kirkendall has stayed on the case of Enron Task Force prosecutorial abuse even while most of the world has turned away, apparently believing that "mission accomplished" (ie putting Skilling in jail) justifies about any set of shady tactics.

But the evidence continues to grow that Skilling did not get a fair trial. We know that the task force bent over backwards to pressure exculpatory witnesses from testifying for Skilling, but now we find that prosecutors may have hidden a lot of exculpatory evidence from the defense.

Meanwhile, continuing to fly under the mainstream media's radar
screen is the growing scandal relating to the Department of Justice's
failure to turnover potentially exculpatory evidence to the defense
teams in two major Enron-related criminal prosecutions (see previous
posts here and here). The DOJ has a long legacy of misconduct in the Enron-related criminal cases that is mirrored by the mainstream media's myopia in ignoring it (see here, here, here, here and here).

This motion
filed recently in the Enron-related Nigerian Barge criminal case
describes the DOJ's non-disclosure of hundreds of pages of notes of FBI
and DOJ interviews of Andrew Fastow, the former Enron CFO who was a key prosecution witness in the Lay-Skilling trial and a key figure in the Nigerian Barge trial.

Enron Task Force prosecutors withheld the notes of the Fastow
interviews from the defense teams prior to the trials in the
Lay-Skilling and Nigerian Barge cases. If the Fastow notes turn out to
reflect that prosecutors withheld exculpatory evidence or induced
Fastow to change his story over time, then that would be strong grounds
for reversal of Skilling's conviction and dismissal of the remaining
charges against the Merrill Lynch bankers in the Nigerian Barge case.

The post goes on to describe pretty substantial violations of FBI rules in handling interviews with Fastow, including destruction of some of the Form 302's summarizing early interviews. The defense hypothesis is that Fastow changed his story over time, particularly vis a vis Skilling's involvement, under pressure from the task force and the 302's were destroyed and modified to hide this fact from the defense, and ultimately the jury.

Long Time in Coming

Just about everything in the PC architecture has been upgraded -- much better microprocessors, more elaborate OS's, more memory, a much higher bandwidth bus architecture, etc. However, one bit of 1980's era design still sits at the heart of the computer - the BIOS. Sure, manufacturers have agreed to some extensions (particularly plug and play) and motherboard makers add in extensions of their own (e.g. for overclocking) but the basic BIOS architecture and functionality, which sits underneath the OS and gets things started when you flip the "on" switch, is basically unchanged.

A few years ago, Intel proposed a replacement, but ironically only Apple has picked up on the BIOS replacement called EFI. Now, it appears, at least one leading motherboard manufacturer for PC's is putting a toe in the water:

The specification allows for a considerable change in what can be implemented
at this very low level.

EFI is a specification that defines a software interface between an operating
system and platform firmware. EFI is intended as a significantly improved
replacement of the old legacy BIOS firmware interface used by modern PCs....

The Critical Flaw with Catastrophic Global Warming Theory

I began with an 85-page book. I shortened that to a 50-minute film, and then a 9-minute film. With that experience, I think I can now pull out and summarize in just a few paragraphs why we should not fear catastrophic global warming. Here goes:

Climate catastrophists often argue that global warming theory is "settled science." And they are right in one respect: We have a pretty good understanding of how CO2 can act as a greenhouse gas and cause the earth to warm. What is well agreed upon, but is not well communicated in the media, is that a doubling of CO2, without other effects that we will discuss in a moment, will heat the earth about 1 degree Celsius (plus or minus a few tenths). This is not some skeptic's hallucination -- this is straight out of the IPCC third and fourth assessments. CO2, acting alone, warms the Earth only slowly, and at this rate we would see less than a degree of warming over the next century, more of a nuisance than a catastrophe.

But some scientists do come up with catastrophic warming forecasts. They do so by assuming that our Earth's climate is dominated by positive feedbacks that multiply the initial warming from CO2 by a factor of three, four, five or more. This is a key point -- the catastrophe does not come from the science of greenhouse gases, but from separate hypotheses that the earth's climate is dominated by positive feedback. This is why saying that greenhouse gas theory is "settled" is irrelevant to the
argument about catastrophic forecasts. Because these positive feedbacks are NOT settled science. In fact, the IPCC admits it does not even know the sign of the most important effect (water vapor), much less its magnitude. They assume that the net effect is positive, but they are on very shaky ground doing so, particularly since having long-term stable systems like climate dominated by positive feedback is a highly improbable.

And, in fact, with the 100 or so years of measurements we have for temperature and CO2, empirical evidence does not support these high positive feedbacks. Even if we assign all the 20th century warming to CO2, which is unlikely, our current warming rates imply close to zero feedback. If there are other causes for measured 20th century warming other than CO2, thereby reducing the warming we blame on CO2, then the last century's experience implies negative rather than positive feedback in the system. As a result, it should not be surprising that high feedback-driven forecasts from the 1990 IPCC reports have proven to be way too high vs. actual experience (something the IPCC has since admitted).

However, climate scientists are unwilling to back down from the thin branch they have crawled out on. Rather than reduce their feedback assumptions to non-catastrophic levels, they currently hypothesize a second man-made cooling effect that is masking all this feedback-driven warming. They claim now that man-made sulfate aerosols and black carbon are cooling the earth, and when some day these pollutants are reduced, we will see huge catch-up warming. If anything, this cooling effect is even less understood than feedback. What we do know is that, unlike CO2, the effects of these aerosols are short-lived and therefore localized, making it unlikely they are providing sufficient masking to make catastrophic forecasts viable. I go into several reality checks in my videos, but here is a quick one: Nearly all the man-made cooling aerosols are in the northern hemisphere, meaning that most all the cooling effect should be there -- but the northern hemisphere has actually exhibited most of the world's warming over the past 30 years, while the south has hardly warmed at all.

In sum, to believe catastrophic warming forecasts, one has to believe both of the following:

The climate is dominated by strong positive feedback, despite our experience with other stable systems that says this is unlikely and despite our measurements over the last 100 years that have seen no such feedback levels.

Substantial warming, of 1C or more, is being masked by aerosols, despite the fact that aerosols really only have strong presence over 5-10% of the globe and despite the fact that the cooler part of the world has been the one without the aerosols.

Here's what this means: Man will cause, at most, about a degree of warming over the next century. Most of this warming will be concentrated in raising minimum temperatures at night rather than maximum daytime temperatures (this is why, despite some measured average warming, the US has not seen an increase of late in maximum temperature records set). There are many reasons to believe that man's actual effect will be less than 1 degree, and that whatever effect we do have will be lost in the natural cyclical variations the climate experiences, but we are only just now starting to understand.

UPDATE: Based on a lot of comment activity to this post at its mirror at Climate Skeptic,
I wanted to add a bit of an update. It is sometimes hard to summarize
without losing important detail, and I think I had that happen here.

Commenters are correct that positive feedback dominated systems can
be stable as long as the feedback percentage is less than 100%. By
trying to get too compact in my arguments, I combined a couple of
things. First, there are many catastrophists that argue that climate
IS in fact dominated by feedback over 100% -- anyone who talks of
"tipping points" is effectively saying this. The argument about
instability making stable processes impossible certainly applies to
these folks' logic. Further, even positive feedback <100% makes a
system highly subject to dramatic variations. But Mann et. al. are
already on the record saying that without man, global temperatures are
unbelievably stable and move in extremely narrow ranges. It is hard
to imagine this to be true in a climate system dominated by positive
feedback, particularly when it is beset all the time with dramatic
perturbations, from volcanoes to the Maunder Minimum.

To some extent, climate catastrophists are in a bind. If historic
temperatures show a lot of variance, then a strong argument can be made
that a large portion of 20th century warming is natural occilation. If
historic temperatures move only in narrow ranges, they have a very
difficult time justifying that the climate is dominated by positive
feedbacks of 60-80%.

The point to remember, though, is that irregardless of likelihood,
the historical temperature record simply does not support assumptions
of feedback much larger than zero. Yes, time delays and lags make a
small difference, but all one has to do is compare current temperatures
to CO2 levels 12-15 years ago to account for this lag and one still
gets absolutely no empirical support for large positive feedbacks.

Remember this when someone says that greenhouse gas theory is
"Settled." It may or may not be, but the catastrophe does not come
directly from greenhouse gasses. Alone, they cause at most nuisance
warming. The catastrophe comes from substantial positive feedback (it
takes 60-80% levels to get climate sensitivities of 3-5C) which is far
from settled science.

I Want None of This

Apparently, some conservatives are trying to fuse social conservatism with economic populism. With a bit of hawkish international projection of power thrown in. Barf. The only possible good outcome of this is that maybe it might lead to a redrawing of political lines between such big government folks and libertarians, but I am not that hopeful. Does anyone really doubt that we are heading back to the bad old days of the 1970s?

Why These Particular People?

People have been defaulting on mortgages for all of recorded history. In Roman times, such a default could well result in the mortgage-holder getting sold into slavery, so things have improved a bit. But seriously, people default on their mortgages all the time. So what makes those currently in default more deserving of taxpayer aid than those before them or after them? I mean, other than the fact that the press is paying attention to these particular defaults? A similar question was reasonably asked of 9/11 victims who scored government compensation when victims before or after of other transportation accidents and building fires have not been so rewarded.

I challenge any politician to answer this question with an answer other than "well, these people are in the media spotlight right now and as a politician, I want to be in the spotlight with them."

What
you see above is great news for all the people who would like to buy
homes without going bankrupt a few years down the line. It's VERY bad
news for banks and financial companies that made the original bad loans
without bothering to check whether the borrowers could pay the danged
loan. You figure out who this country should reward - responsible
aspiring home owners or stupid banks.

Video Update

Many of the feed readers out there grabbed my feed before I had fixed the video links in my post on my new climate video. The links are fixed in the original post, but if those fixes are not reflected in your feed, the correct links are below. Right click on the links to save:

After releasing my first climate video, which ran over 50 minutes, I had a lot of feedback that I should aim for shorter, more focused videos. This is my first such effort, setting for myself the artificial limit of 10 minutes, which is the YouTube limit on video length.

While the science of how CO2 and other greenhouse gases cause
warming is fairly well understood, this core process only results in
limited, nuisance levels of global warming. Catastrophic warming
forecasts depend on added elements, particularly the assumption that
the climate is dominated by strong positive feedbacks, where the
science is MUCH weaker. This video explores these issues and explains
why most catastrophic warming forecasts are probably greatly
exaggerated.

You can also access the YouTube video here, or you can access the same version on Google video here.

If you have the bandwidth, you can download a much higher quality version by right-clicking either of the links below:

I am not sure why the quicktime version is so porky. In addition, the sound is not great in the quicktime version, so use the windows media wmv files if you can. I will try to reprocess it tonight. All of these files for download are much more readable than the YouTube version (memo to self: use larger font next time!)

Minimum Wages and the Supply and Demand for Labor

In a post that is a nice follow-on to this one about wages in trucking, Russel Roberts has a nice post about people making minimum wage:

According to Current Population Survey estimates for 2006, 76.5
million American workers were paid at hourly rates, representing 59.7
percent of all wage and salary workers.1
Of those paid by the hour, 409,000 were reported as earning exactly
$5.15, the prevailing Federal minimum wage. Another 1.3 million were
reported as earning wages below the minimum.2
Together, these 1.7 million workers with wages at or below the minimum
made up 2.2 percent of all hourly-paid workers.

Correcting for higher state minimum wages, but also adjusting for illegal immigrants (who are a special case with super-low bargaining power) and factoring in salaried workers (who by law to be salaried have to be making much more than minimum wage) one still finds that less than 2% or less make minimum wage, about half of whom are under 25. Roberts has a follow-on post with comments from Tim Worstall to say that even this number may be too high:

Unfortunately, on the page he’s taken his information from he’s missed one thing which makes his case even stronger.

Nearly three in four workers earning $5.15 or less in 2006 were
employed in service occupations, mostly in food preparation and service
jobs.

That’s your waitron units and barkeeps folks. And what do we know
about people who do these sorts of jobs? Well, perhaps you have to have
actually done them (as I have, everything from the graveyard shift in a
Denny’s to tending bar around the corner from this guy’s
place): they all make tips. In fact, so much so that there is (or at
least used to be when that BLS report was prepared) a special minimum
wage for those in such jobs, one lower than the official Federal
minimum wage.

For example, way back when, the min. wage was $3.35 an hour. Waiters
got $2.01. You didn’t really care because even serving pancakes at 5 am
you made another $25-$30 a shift ($50-$150 in a decent place). Barkeeps
got $3.35 plus tips.

The BLS numbers are reporting what employers paid employees, not
what people are actually earning. So we might in fact say that while
the number being paid the minimum wage or less is 2.2% of the workforce, the number actually earning that figure is more like 0.5%.

As an aside, speaking of bargaining power, it strikes me that prostitution is an excellent example of supply and demand in labor markets trumping government mandates. Prostitutes have absolutely no power to run to the government for help over minimum wage or work condition violations. They have only limited power to get government help even when they are the victim of violence from those who pay them. But on an hourly basis, the most succesful make far more than most Americans.

There's No Shortage, Just A Price You Don't Like

In the absence of government meddling (e.g. price controls) healthy markets seldom create true shortages, meaning situations where one simply cannot obtain a product or service. One might think there was a shortage, for example, of Superbowl tickets, since there are only a few available and tens of thousands, maybe hundreds of thousands, of people who would like to attend. But in fact one can Google "Superbowl tickets" and find hundreds available. You may not like the price ($3500 and up for one ticket), but they are available for sale.

Trucking companies across the country are facing a shortage of long-haul drivers....

High driver turnover has traditionally been a problem throughout the
trucking industry. But retirements and growing shipping demand have
made the shortage of long-haul drivers more acute. Fewer drivers means
delayed deliveries and higher delivery costs that could be passed on to
consumers.The
issue is especially crucial for the Phoenix area, which touts itself as
a shipping hub for businesses fed up with the costs and congestion
around Los Angeles-area ports. The Valley also is headquarters to two
of the country's biggest for-hire trucking companies: Swift
Transportation and Knight Transportation....

Trucking experts say the problem goes beyond a labor shortage in the industry. They call it a threat to the economy.

"Our country needs to figure out how to fix this," said Ray Kuntz,
chairman and chief executive of Watkins and Shepard Trucking in Montana
and chairman of American Trucking Associations. "Our economy moves on
trucks."

Here is the key fact:

• Long-haul wages vary by company and are typically based on
experience, safety record and commercial-driver's-license endorsements.
Long-haul drivers with two or more years of experience usually earn at
least $50,000 to $60,000 a year.

• An entry-level driver with no over-the-road experience starts in the high $30,000 range. Team drivers can earn more.

There is no way in a Platonic vacuum to determine if a wage is too high or too low. But the driver "shortage" gives us a really good hint that maybe these salary levels are no longer sufficient to attract people to the rather unique trucking lifestyle. I probably could write a similar article about how there is a shortage of Fortune 500 CEO's or airline pilots who will accept a $30,000 starting salary. The problem then is not shortage, the problem is that wage demands are rising as trucking is out-competed for talent by alternative careers. In fact, there is not shortage, but a reluctance by trucking firms to accept a new pricing reality in the market for drivers.

By the way, to some extent this "shortage" is indeed an artificial creation of the government. Under NAFTA, Mexican truckers were long-ago supposed to have been given access to the US market, but overblown safety concerns have been used as a fig-leaf to block the provision as a protection for US truckers and a subsidy to the Teamsters. If a truck driver "shortage" is really a national economic problem, then let's stop blocking this NAFTA provision. But my sense is that the trucking companies in this article would freak at this, because they are not really concerned about the national economy but, reasonably, with rising wages hurting their bottom line. My guess is this article is the front-end of a PR push to get states like Arizona to subsidize ... something. Maybe truck driver training. Look for such legislative proposals soon.

The Income-Shift Is Reversed

Typically, wealthy individuals and investors will work hard to delay declaration of income and to push taxes off as far into the future as possible. The present value of taxes paid a year from now are less than paying the taxes today.

But over the last several weeks, I have had casual conversations with entrepreneurs and individuals from the moderately to very wealthy, and almost to a one they have said they are trying to pull income into 2007 and 2008 in anticipation of potentially large increases in capital gains tax rates and the rates at the top of the bracket.

On a different topic, a friend and I depressed ourselves in a bar last night laying out the case that the next decade may in many ways be a repeat of the 1970s. Already, we see both parties reverting to the economic prescriptions they promoted in the 1970s. Further, this week may herald the beginning of an inflationary monetary and fiscal policy combined with government enforced structural limits on growth (e.g. Co2 abatement policy, trade protectionism, price controls, high marginal tax rates and capital gains tax rates, lending restrictions, etc.) We are seriously discussing nationalizing a major industry (health care) for the first time since the 1970's (when nationalizing oil was seriously considered). Currently we have a Republican President who is less market-oriented than his Democratic predecessor, and at least as clueless on economic issues as were Nixon and Ford. All that's left to do is elect a new Jimmy Carter in 2008...

Dilemma that's Not Really a Dilemma

When businesses get US Census surveys, they are not the happy smiling documents one gets as an individual. Stamped all over it is "Your Response Is Required By Law" and when filling it out, one has the suspicion that he is facilitating his own doom by providing government weenies the data ammunition they need to tax or regulate us more.

The survey asks for total revenues and costs and payrolls cut a bunch of different ways, and takes about 1-2 hours to fill out if one is trying to be accurate. However, I looked at the survey closer this year and I noticed that this seven-page survey is for an individual business location.

I have nearly 200 campgrounds and other recreational sites. One of the tricks of our business is we have learned to operate a lot of small dispersed sites in a cost-effective manner. But now it turns out that to be strictly compliant with the census process, I need to fill out all of this information for each of these sites. In other words, rather than spend 1-2 hours (the feds say it should take an hour) on one summary report, in fact what I am technically legally supposed to do is fill out two hundred such reports, at a cost of at least 200 hours of my time. That is 10% of a standard man-year.

So -- do I do it the "right" at the cost of 200 hours of my time or do I do it the way I did it last year? I won't give my actual answer, which I think the post title telegraphs fairly well, but you can think about yours (yes, Travis, I know, more rope).

Beware of U3 on Your Flash Drive

Without really knowing what I was doing, I bought a Sandisk flash drive with "U3" on it. This is an application that when you plug the flash drive into your computer, spoofs the computer into thinking it is a CD-ROM drive, so programs can be run from it. I presume this might be useful if you compute from a lot of public computers and want to carry your own email client around, but for me, this was useless functionality.

All that U3 did for me was radically slow down the process of plugging my flash drive into the computer and getting my damn files on and off. There is sort of a boot up process, and on several occasions it crashed my whole system, despite trying to update the software to the most recent version. Unfortunately, the built in uninstaller does not work, so, like spyware, the U3 has become impossible to remove. Despite paying $50 for this thing, I am seriously considering throwing it in the trash and getting a new one without U3 on it.

Update: Downloading this finally got rid of it. Again, this might be a cool tool for folks who use public computers or other people's computers a lot. However, if you don't need this functionality, and just want to move files around, you will not want the instability and incompatibility problems U3 brings.

Beware Articles Without Links

Several sites have announced what purports to be a Darwin Award winner this year. I saw the link first at Q&O, but the same story has been on Pajamas Media and several other sources. I thought the story was awesome, but was suspicious in that too-good-to-be-true way, particularly when the original source had "sources" but no links. This is always a red flag for me.

So I took a key phrase from a quote in the article, in this case "on that bridge when Thurston shot" and plugged it into google. The second link is to the "official" Darwin Awards site, which tagged this story as an urban legend over 10 years ago. Looking down the Google search, it appears this old chestnut comes back in 2-3 year cycles.

Post-Scarcity World

I just bought 2 TB in four 500 MB drives for less than $430 including shipping (that's an improvement from $150 per MB in 1979 to about $0.22 per MB**). With the great tools now available on most motherboards, I arrayed these in a fast and redundant Raid 0+1 setup with 1TB of storage. (Yes, to the total geeks out there, I would have preferred Raid 1+0 but alas the Nvidia chipset on my board did not support it.)

** By the way, this 700x improvement over 30 years actually has little or nothing to do with Moore's law. While some of the materials sciences are related, this improvement has little to do with silicon and nothing to do with transistor density. This is the result of incredible human creativity in the face of brutal competition, both from other hard drive manufacturers as well as from substitutes like static RAM.

Unvarnished Technocracy

The New York Times editorial board had one of the most jaw-dropping pieces I have read in a long time. In it, they are absolutely unapologetic in saying that they think the government can spend your money better than you can -- and the larger the government take, the happier we all will be.

The munificence of American corporate titans warms the heart, sort of.
The Chronicle of Philanthropy reports that the top 50 donors gave $7.3
billion to charity last year — about $150 million per head....

Yet we’d be so much happier about all the good things America’s
moneyed elite pay for if the government made needed public investments.

The flip side of American private largess is the stinginess of
the public sector. Philanthropic contributions in the United States —
about $300 billion in 2006 — probably exceed those of any other
country. By contrast, America’s tax take is nearly the lowest in the
industrial world.

Oh my God, does anyone actually believe that Congress does a better job spending your money than you do? Apparently they do:

Critics of government spending argue that America’s private sector does
a better job making socially necessary investments. But it doesn’t.
Public spending is allocated democratically among competing demands.
Rich benefactors can spend on anything they want, and they tend to
spend on projects close to their hearts.

LOLOLOL. Has anyone looked at the last highway bill? How many tens of thousands of politically motivated earmarks were there?

Philanthropic contributions are usually tax-free. They directly reduce
the government’s ability to engage in public spending. Perhaps the
government should demand a role in charities’ allocation of resources
in exchange for the tax deduction. Or maybe the deduction should go
altogether. Experts estimate that tax breaks motivate 25 percent to 30
percent of contributions.

At the end of the day, this is not about a better prioritization process for spending -- this is about the NY Times getting a bigger say for itself in said spending. They know that Warren Buffet couldn't give a rat's behind what the NY Times thinks about how he spends his money, but Congressmen trying to get reelected do care. The NY Times wields a lot of political, but little private, influence, so they want to see as much spending as possible shift to political hands where the Times wields clout.

Postscript: Boy, here is some quality journalism:

Federal, state and local tax collections amount to just more than 25.5
percent of the nation’s economic output. The Finnish government
collects 48.8 percent. As a result, the United States spends less on
social programs than virtually every other rich industrial country,
according to the Organization for Economic Cooperation and Development.
The Finnish government probably has money to build children’s health
clinics.

"Probably has money?" What does that mean? Do they have government-funded children's health clinics or not? The Times couldn't work up enough energy to fact-check that? And by the way, who, other than the NY Times, declared that the best marginal use of additional public funds is for children's health clinics?

Postscript #2: Many of the very rich have been funding schools that are competitive with government-monopoly schools. In this and many other cases, wealthy people fund programs that work better and cheaper than government alternatives. I am sure that not only would the feds be happy to have this money to spend themselves (on some fat earmarks for key donors, most likely) but they would additionally be thrilled to get rid of the competition.

Update: I must be going senile. I missed the most obvious logical fallacy of all. The NY Times says that our democratic government is the best possible mechanism for allocating funds. But doesn't that also mean its the best possible mechanism for setting spending levels? How can it complain that our democratic government is doing a bad job in setting total spending levels but does a great job in allocating that spending?

Bye Bye Fred

Antarctica

On Sunday, CBS claimed that Antarctica is melting. In fact, once small
portion of the Antarctic peninsula is warming and may be losing snow, while the
rest of Antarctica has not been warming and in fact has been gaining ice cover.
The show visits an island off the Antarctic Peninsula which has about as much
weather relevance and predictive power to the rest of Antarctica as Key West has
to the rest of the United States. Absolutely absurd.

Capitalism is Proving Too Dynamic For Progressives

Those of us with long memories, say back to the 1970's, can remember that the Left constantly complained about manufacturing and assembly-line work as "dehumanizing." Their goal was for workers to transcend this Tayloristic "hell" into clean, white collar office work. Well, now that we have done so by replacing many assembly-line workers with machinery programmers and service workers, the Left now makes the argument that assembly-line work was the Nirvana of all employment, and the only possible road to the middle class for many Americans. If I was an academic with time on my hands to do an in-depth research project, I would love to go back to records of leftish complaints about the economy form the 1960s and 1970s. Because in large part, they have gotten everything they were asking for and more, but now they complain about the change.

One of the explanations of this paradox is that progressives, despite their name, are extremely conservative (little c) in that they fear change in the economy and in work patterns more than anything else. Changing trade patterns, changes in economic mix, changes in work relationships -- these all send progressives into a tizzy. I know that in some sense I am answering a paradox with a greater paradox. Rather than repeat the argument, here is my argument in depth that capitalism is too dynamic for progressives. An excerpt from that post:

Beyond just the concept of individual decision-making, progressives
are hugely uncomfortable with capitalism. Ironically, though
progressives want to posture as being "dynamic", the fact is that
capitalism is in fact too dynamic for them. Industries rise and fall,
jobs are won and lost, recessions give way to booms. Progressives want
comfort and certainty. They want to lock things down the way they are.
They want to know that such and such job will be there tomorrow and
next decade, and will always pay at least X amount. That is why, in
the end, progressives are all statists, because, to paraphrase Hayek,
only a government with totalitarian powers can bring the order and
certainty and control of individual decision-making that they crave.

Progressive elements in this country have always tried to freeze
commerce, to lock this country's economy down in its then-current
patterns. Progressives in the late 19th century were terrified the
American economy was shifting from agriculture to industry. They
wanted to stop this, to cement in place patterns where 80-90% of
Americans worked on farms. I, for one, am glad they failed, since for
all of the soft glow we have in this country around our description of
the family farmer, farming was and can still be a brutal, dawn to dusk
endeavor that never really rewards the work people put into it.

Postscript: I still argue that the "decline" of American manufacturing is a chimera of how statistics are gathered. As I wrote here:

The best way to illustrate this is by example. Let's takean automobile assembly plant circa 1955. Typically, a large manufacturing
plant would have a staff to do everything the factory needed. They had
people on staff to clean the bathrooms, to paint the walls, and to
perform equipment maintenance. The people who did these jobs were all
classified asmanufacturing workers, because they worked in a manufacturing
plant. Since 1955, this plant has likely changed the way it staffs
these type jobs. It still cleans the bathrooms, but it has a contract
with an outside janitorial firm who comes in each night to do so. It
still paints the walls, but has a contract with a painting contractor
to do so. And it still needs the equipment to be maintained, but
probably has contracts with many of the equipment suppliers to do the
maintenance.

So, today, there might be the exact same number of people in the
factory cleaning bathrooms and maintaining equipment, but now the
government classifies them as "service workers" because they work for a
service company, rather thanmanufacturing workers. Nothing has really changed in the work that people do, but government stats will show a large shift from manufacturing to service employment.

Admission That Was A Long Time in Coming

The Seattle Supersonics have finally admitted what rational folks have known for a long time: Billion dollar municipal stadiums are just taxpayer subsidies for already-rich players and owners, and do nothing for local economic development. Here is what the Sonics ownership stated in court papers (part of a case where they are trying to break their lease in Seattle):

"The financial issue is simple, and the city's analysts agree,
there will be no net economic loss if the Sonics leave Seattle.
Entertainment dollars not spent on the Sonics will be spent on
Seattle's many other sports and entertainment options. Seattleites will
not reduce their entertainment budget simply because the Sonics leave,"
the Sonics said in the court brief.

...Rodney Fort, a
professor of sports management at the University of Michigan, who has
criticized the economic-impact claims made by pro-sports teams, called
the Sonics' latest argument "the best chuckle" he's had in a long time.

My son learned of one additional downside this year to subsidizing an expensive stadium for the hapless Cardinals. He is a huge Cowboys fan, and there was to be a really good matchup in regular season this year that would be televised nationally (I can't remember which game, maybe the Packers regular season game). We did not get to see the game, because the local network was obligated to show the Cardinals game instead. If you have no team, you always get the best game on TV.

Cargo Cult Economics

Venezuela launched a new currency with the new year, lopping off three
zeros from denominations in a bid to simplify finances and boost
confidence in a money that has been losing value due to high inflation....

"We're ending a historical cycle of ... instability in prices,"
Finance Minister Rodrigo Cabezas said Monday, adding that the change
aims to "recover a bolivar that has significant buying capacity."

Prices have risen as Chavez has pumped increased amounts of the
country's oil income into social programs, reinforcing his support
among the poor and helping to drive 8.4 percent economic growth in 2007.

The Central Bank is promoting the new monetary unit with an ad
campaign and the slogan: "A strong economy, a strong bolivar, a strong
country." Officials, however, have yet to clearly spell out their
anti-inflationary measures.

Good to see the government taking meaningful steps. Next up will be "Whip Inflation Now" buttons.

The 8.4 percent growth cited above may be illusory, given this:

Venezuela has had a fixed exchange rate since February 2003, when
Chavez imposed currency and price controls. The government has said it
is not considering a devaluation any time soon.

But while the strong bolivar's official exchange rate will be fixed
as 2.15 to $1, the black market rate has hovered around the equivalent
of 5.60 to $1 recently.

My First and Only Post on the Writers Strike

I was surprised to see on someone's blog that the writers' strike was still going on. I would think that the biggest danger of going on strike (beyond the lost income) would be that no one notices you are not working. This seems to be a real danger faced by the writers, and an important reason why you will never see Congress go on strike.

Don't Say I Didn't Warn You -- The Environmentalist Case for Fascism

Liberal democracy is sweet and addictive and indeed in the most
extreme case, the USA, unbridled individual liberty overwhelms many of
the collective needs of the citizens. The subject is almost sacrosanct
and those who indulge in criticism are labeled as Marxists, socialists,
fundamentalists and worse. These labels are used because alternatives
to democracy cannot be perceived! Support for Western democracy is
messianic as proselytised by a President leading a flawed democracy

There must be open minds to look critically at liberal democracy.
Reform must involve the adoption of structures to act quickly
regardless of some perceived liberties. ...

We are going to have to look how authoritarian decisions
based on consensus science can be implemented to contain greenhouse
emissions. It is not that we do not tolerate such decisions in the very
heart of our society, in wide range of enterprises from corporate
empires to emergency and intensive care units. If we do not act
urgently we may find we have chosen total liberty rather than life.

He has great admiration for how China does things

The [plastic shopping bag] ban in China will save importation and use of five million tons of
oil used in plastic bag manufacture, only a drop in the ocean of the
world oil well. But the importance in the decision lies in the fact
that China can do it by edict and close the factories. They don’t have
to worry about loss of political donations or temporarily unemployed
workers. They have made a judgment that their action favours the needs
of Chinese society as a whole.

Don't say I didn't warn you.

By the way, here is a little "tip." The author says this:

Unfortunately it seems increasingly likely that the IPCC underestimated
the speed of climate change and failed to recognise the likely effect
of a range of tipping points which may now be acting in concert.

I believe that man is having a warming effect on the earth, but that effect is small and non-catastrophic. There are reasons I may be wrong. BUT, you should immediately laugh out of the room anyone who talk about "a range of tipping points" in a system like the earth's climate that has been reasonably stable for tens of millions of years. When used by climate catastrophists, the word "tipping point" means: Yeah, we are kind of upset the world is not warming nearly as fast as our computer models say it should, so we will build an inflection point about 10 years out into the forecast where the slope of change really ramps up and we will call it a "tipping point" because, um, that is kindof a cool hip phrase right now and make us sound sophisticated and stuff.

Postscript: Anyone who makes this statement is WELL grounded in reality:

All this suggests that the savvy Chinese rulers may be first out of the blocks to assuage greenhouse emissions

LOLOLOL. They are building a new coal plant, what, every three days or so in China?

Postscript #2: Quiz for older folks out there: How long ago was it that environmentalists were encouraging us to use plastic bags over paper because it saved a tree?

Maricopa County supervisors are questioning County Attorney Andrew
Thomas' use of public money to produce and distribute hundreds of
thousands of slick booklets that feature his name and smiling portrait.

County administrators on Tuesday said the 45-page pamphlets,
distributed in local newspapers, were paid for through the county's
general fund.

They believe more than 500,000 copies were produced. Most supervisors
said they were astonished to see that Thomas spent the money on
booklets that they said were "self-serving" and "self-promoting."

The only other comment I would make is that, knowing out board of supervisors, they are probably mad only because they did not think of this approach for their own re-election.

Why We Don't Need More Highway Funds

We don't need more highway funds because right now, as estimated by the Anti-Planner, about 40% of Federal highway funds go to non-highway projects. In particular:

Over the past fifteen years alone, America has spent well over $100
billion on rail transit construction projects but has little to show
for it. As mobility advocate John Semmens pointed out a few days ago in
a recent Washington Times op ed, transit’s share of urban travel has actually declined since 1995.

Wow, money well spent, huh? I have written many times on commuter rail follies in Phoenix and other western cities that are utterly unsuited to rail transit. The most recent news here in Phoenix is that design flaws are appearing, even before the first train is run.

OK, I am Not the Only One Asking This Question

OK, the comment thread in my post on Romney evolved into a good discussion on health care, but I did not get a very good answer on how Romney supporters could possibly consider him the inheritor of the Reagan small-government legacy. Apparently, I am not the only one confused on this, as both Michael Tanner and Jerry Taylor chime in with the same question.

What does it say about the Republican Party when the leading fusionist conservative in the field - Mitt Romney, darling of National Review and erstwhile heir to Ronald Reagan -
runs and wins a campaign arguing that the federal government is
responsible for all of the ills facing the U.S. auto industry, that the
taxpayer should pony up the corporate welfare checks going to Detroit
and increase them by a factor of five, that the federal
government can and should move heaven and earth to save “every job” at
risk in this economy, and that economic recovery is best achieved by a
sit-down involving auto industry CEOs, labor bosses, and government
agents armed with Harvard MBAs to produce a well-coordinated strategic
economic plan? That is, what explains the emergence of economic fascism
(in a non-pejorative sense) in the Grand Old Party at the expense of
free market capitalism?

Unfortunately, 1970-style Nixonian Republicans are back in force. Can "Whip Inflation Now" buttons be far behind?

Government is The Biggest Barrier to Alternative Energy

And by the title of this post, I don't mean because they are not throwing enough money and mandates at it. Here is what I wrote about the alternative energy mandates in the most recent energy bill:

They want 15% of power generation from renewables by 2020. I am not
sure if this includes hydro. If it does, then a bunch of Pacific
Northwest utilities already have this in the bag. But even if
"renewable" includes hydro, hydro power will do nothing to meet this
goal by 2020. I am not sure, given environmental concerns, if any
major new hydro project will ever be permitted in the US again, and
certainly not in a 10 year time frame. In fact, speaking of
permitting, there is absolutely no way utilities could finance, permit,
and construct 15% of the US electricity capacity by 2020 even if they
started today. No. Way. By the way, as a sense of scale, after 35
years of subsidies and mandates, renewables (other than hydro) make up
... about .27% of US generation.

The Ethanol Follies Continue

In an audacious move Sunday, General
Motors demanded that the federal government step in and create a
national ethanol fuel station infrastructure at the same time the
company announced that it has invested in Coskata, a cellulosic ethanol
startup company.

Coming on
the heels of federal legislation that set national mandates for ethanol
production, GM’s strategy amounts to federal guarantees for its
investment in the ethanol industry.

“We
need to grow E85 (ethanol) stations,” said GM CEO Rick Wagoner at a
Detroit Auto Show news conference. “It is time for the U.S. government
to do it through regulation.”

The article goes on to document the strong rent-seeking history of Coskata.

It’s great that our politicians have discovered the need for new energy
technologies. But it appears that Washington is determined to put its
money—our money—on the wrong horse. Right now, researchers are studying
a host of energy solutions, including hydrogen, high-mileage diesel,
plug-in hybrids, radical reductions in vehicle weight and cellulosic
ethanol (made from cornstalks, switchgrass or other nonfood crops). It
is far too soon to say which of these holds the most promise. But,
instead of promoting experimentation and competition to find the best
solutions, politicians seem ready to declare ethanol the winner. As a
result, our nation could wind up with the worst of both worlds: an
“alternative” energy that is enormously expensive yet barely saves a
gallon of oil.

This is Really Cool

This is really cool. They recreate the Omaha beach landings with three actors, a camera, a green screen and lots of computer work. Really amazing results. Beware anyone whose business model relies on movies being produced in the traditional manner, with lots of actors and props.

The Joys of Government Mandates

Today, I had to buy gas in Oregon. Usually, I try to gas up just before I enter Oregon, in protest of their anachronistic laws making self-service gasoline illegal. Unfortunately, I had not choice but to stop in a station in Portland. Because of this government mandate, I had to sit in my car for 5 minutes waiting futilely for service. Getting none, I finally got out and gassed up myself. The state-mandated car-fueling employee, who couldn't manage to get to me to fill up my car, was at my car in 5 seconds once he saw that I was impinging on his territory by gassing up my own vehicle. I told him full service was not service at all if I had to wait five minutes, and he could have me arrested if he wanted. For the rest of the time I gassed my car, I was subjected to an ignorant left-coast lecture on how the mandate created jobs. All this lecture took place, of course, while other customers waited for service. I wonder what it would feel like to know with absolute certainty that your job was completely useless and existed only because of a trick of legislation. People who owe their jobs to the government are always a lot more vigilent about protecting their turf than they are about providing service.

These kinds of "government financing exernalities" are commonly used
to justify government regulations that restrict individual freedom.
Liberals use these arguments to justify such regulations as mandatory
seat belt laws, smoking bans (because government may end up subsidizing
smokers' medical treatment if they get lung cancer), and most recently
restrictions on morgage terms (because the government may bail out
people who end up defaulting). Conservatives have their own favorite
government financing externality arguments. For example, many argue
that we should restrict immigration because otherwise the immigrants
might collect welfare benefits that are paid for by taxpayers.
Obviously, the greater the role of government in financing a wide range
of activities, the greater the number of potential government financing
externalities. The expansion of government spending facilitates the
expansion of government regulation intended to curb the negative
effects of the spending.

Government financing externality arguments generate their appeal
from the fact that they seem not to be paternalistic. We are willing to
let you hurt yourself, advocates implicitly suggest, but we can't let
your bad behavior hurt the taxpayers.

The libertarian solution to this problem is to eliminate the
government financing that created the "externality" in the first place.
I

Irony Alert

But I wanted to share two funny bits with you. First, from the climate crowd who claims to have their science so buttoned down that we skeptics should not even be allowed to talk about it any more, comes this:

Taking into account the new data, they said, seven of the eight
warmest years on record have occurred since 2001

What new data? That another YEAR had been discovered? Because when
I count on my own fingers, I only can come up with 6 years since 2001.

Second, comes this bit of irony: There are many reasons why satellites gives us a potentially better measure for world temperatures than surface temperature instruments. They give us full global coverage (except the poles) and are free of urban and other biases. So I have always wondered if the only reason that climate scientists defend the surface temperature record over satellites is merely because they don't like the answer satellites are giving (they show less warming than do surface temperature records).

But here is the irony: The person who is arguably the strongest defender of land-based measurement over satellites, and who maintains what neutral observers feel is the most upwardly-biased surface temperature record, is Gavin Schmidt, who is ... wait for it ... head of the Goddard Institute of Space Studies at NASA.

More Command and Contol Health Care in Massachusetts

Well, I can't blame this bit of command and control on Mitt Romney, but it is still a great example of politicians doing exactly the opposite of what is needed to making US health care even more convenient and affordable.

In-store health care services offer cheap primary care, ease the
burden on emergency rooms, and help people who can’t afford health
insurance–or who have insurance but can’t find a decent primary care
physician. They also boast stratospheric customer satisfaction ratings.

The decision by the state Public Health Council,
“jeopardizes patient safety,” Menino said in a written statement.
“Limited service medical clinics run by merchants in for-profit
corporations will seriously compromise quality of care and hygiene.
Allowing retailers to make money off of sick people is wrong.”

This is as opposed to doctors in hospitals, who everyone one knows don't make any money off of sick people. Seriously, who in their right mind could possibly oppose a free market solution to cleaning out these non-life-threatening type cases from hospital emergency rooms?

Getting the Bureaucrat's Permission to Speak

Ezra Levant has posted YouTube videos of his interrogation by an oily little Canadian bureaucrat called "a human rights officer." He has done it in a series of post, so go to his site and keep scrolling. Apparently, in Canada, free speech is not a human right but "freedom from criticism" is, at least for certain politically connected groups (threatening violence at the drop of a hat also seems to help gain one this "freedom from criticism" right. Levant is being hauled in by the government for publication of those Danish cartoons that barely register at 0.1 on a criticism meter that goes to 10.

Well, actually, I'm not, am I? That's the reason I was sitting
there. I don't have the right to my opinions, unless she says I do.

For all of you who left the US for Canada for more freedom from Bush and the Iraq war, have at it. Because Bush will be gone and we will be out of Iraq long before Canada (as well as Europe) catch up to the US in terms of its protection of [most] individual rights, like free speech.

Ms McGovern, a blandly unexceptional bureaucrat, is a classic example
of the syndrome. No "vulnerable" Canadian Muslim has been attacked over
the cartoons, but the cartoonists had to go into hiding, and a gang of
Muslim youths turned up at their children's grade schools, and Muslim
rioters around the world threatened death to anyone who published them,
and even managed to kill a few folks who had nothing to do with them.
Nonetheless, upon receiving a complaint from a Saudi imam trained at an
explicitly infidelophobic academy and who's publicly called for the
introduction of sharia in Canada, Shirlene McGovern decides that the
purely hypothetical backlash to Muslims takes precedence over any
actual backlash against anybody else.

Observer Effect in Blogging

Like the typical Internet geek who reads XKCD, I immediately open Google and search for the exact phrase "Died in a Blogging Accident." Of course, I don't know if the answer was ever "2," but now the search yields 7,900 results, most of which seem to refer to this XKCD cartoon. And now I have added one more.

Update: One suspects that the number was always greater than "2", since filtering out responses that include "XKCD" still yields over 6000 results.

Question for Romney Supporters

I just don't understand the enthusiastic support for Mitt Romney and his description as an heir to the Reagan legacy. In particular, he claims to single-handedly have implemented HillaryCare in Massachusetts, the program that was arguably responsible for sweeping the Republicans into Congress in 1994. My sense is that Hillary in the intervening years has moved on to an even more socialist plan, but everything I see in the Romney plan looks very much like Hillary's original proposal.

Yeah, this is Going to Work

Prime Minister Wen Jiabao
responded Wednesday to growing public anxiety about inflation by
announcing that China would freeze energy prices in the near term, even
as international crude oil futures have continued to surge....

Last November, China raised gasoline and diesel prices by almost 10
percent, partly to appease officials at state-owned refineries.
Refiners had complained that price controls were forcing them to
swallow the difference between higher prices for crude oil on the world
market and regulated consumer prices at home for refined products. So
refineries cut back production of gasoline and particularly diesel,
causing long lines at fuel stations around the country.

I got my driver's license in 1978, just in time to spend the first few months of my driving life sitting in gas lines with the family car, a result of a series of market distorting actions by the US government.

The Economist says,
of the state of economics education in France and Germany, "I
desperately hope it's not really this bad." Unfortunately, I think it's
really that bad. When the 35 hour work week was proposed, I was talking
to someone in the French consulate who did economics and trade. "Aren't
you worried that this will raise employer's costs and lead to business
failures or higher unemployment?" I asked.

"That's just Anglo-saxon economics" was his rather stunning reply. Apparently, in France, demand curves do not slope downwards.

NFL Playoffs, Baby

The NFL playoffs are absolutely my favorites sporting event of the year. So of course I have to get on an airplane Sunday afternoon to get to a Monday morning meeting. To get in the spirit, here is one of my favorite NFL spoofs, Peyton Mannings United Way commercial on SNL:

Good Job Sheriff Joe!

Frequent readers will know that I don't think much of our County Sheriff Joe Arpaio. Sheriff Joe gains a ton of PR for himself as the "toughest sheriff in America" and relishes in making jail conditions as miserable as possible. Recognize that this is the jail that holds many people after arrest but before conviction.

Now on to the figure mentioned in the Dickerson piece of 2,150
"prison condition" lawsuits since 2004. Anyone with two licks of sense
can go online at pacer.psc.uscourts.gov, or dockets.justia.com,
enter "Arpaio" into the federal court docket, then count the lawsuits
that name "prison conditions" as the cause. Count back to 2004, and as
of mid-December, that number was more than 2,150.

The same search for
the top jail custodians in L.A., New York, Chicago, and Houston nets a
total of only 43 "prison condition" lawsuits.

"For the period January 1, 1993, to [November 29, 2007], the county
has paid $30,039,928.75 on Sheriff Department General Liability
claims," state the docs. "This figure includes all payments, attorney
fees, other litigation expenses, settlements, payments on verdicts,
etc."

Additionally, New Times
asked Crowley how much the lawsuit insurance policy that also covers
the sheriff has cost taxpayers. Crowley croaked, "The county has paid
for General Liability coverage for the period 3-1-95 to 3-1-08 total
premiums of $11,345,609.50."

Keep in mind that this
liability coverage figure is high, in part, because of all those
lawsuit payoffs to relatives of dead inmates.

From 1995 to 1998, the county paid $328,894 a year for an insurance policy with a $1 million deductible.

Today,
Maricopa County pays a yearly premium of $1.2 million for outside
insurance with a $5 million deductible. For any lawsuit that costs $5
million or less, the county foots the entire bill. It's the best policy
the county can buy because of Arpaio's terrible track record.

Next Step for Author of AZ Employer Sanctions: Target the Babies

Russell Pearce is the Arizona legislator who authored the AZ employer sanctions law. Remember, that's the law that requires, among other things, employers to check the immigration status of current employees using an INS system that has federal rules in place that make it illegal to use this system to... check the immigration status of current employees. His plan is to reduce a major source of labor in the Arizona economy which, by the way, has a 3.5%-4.1% unemployment rate over the last year, the lowest level in 30 years.

The newest front in the battle over illegal immigration is dragging health-care workers into the fray.

The Arizona Hospital and Healthcare Association is trying to kill a
proposal by Rep. Russell Pearce, R-Mesa, that would require its members
to check the citizenship of patients who deliver babies at Arizona
facilities.

If neither of the parents can prove citizenship, the hospital would be barred from issuing a regular birth certificate.

Babies of parents who are here legally but not citizens also would be denied regular birth certificates.

Beyond the obvious concerns about driving moms away from medical care for their deliveries, Mr. Pearce has a teeny-tiny Constitutional issue he must deal with in the 14th Amendment:

All persons born or naturalized in the United States, and subject to
the jurisdiction thereof, are citizens of the United States and of the
State wherein they reside.

Mr. Pearce is hoping that "subject to the jurisdiction thereof" can be stretched to say that such persons do not include immigrants. In fact, the Supreme Court does not seem to have ruled on this specific issue (corrections welcome in comments) but historically they have been extremely loath to place limits on this. And no one except Mr. Pearce and perhaps a few of his immediate family members believes that barring citizenship to children of legal immigrants will pass Constitutional muster. And I am pretty sure that no matter how these questions come out, disallowing birth certificates would never survive a court challenge. I don't think the immigrants' home country would issue a birth certificate in such a case so we would be creating people without a country.

An Old Joke, But New To Me

1960s

A logger cuts and sells a truckload of lumber for $100. His cost of
production is four-fifths of that amount. What is his profit?

1970s New-math

A logger exchanges a set (L) of lumber for a set (M) of money. The
cardinality of Set M is 100. The set C of production costs contains 20
fewer points. What is the cardinality of Set P of profits?

1980s

A logger cuts and sells a truckload of lumber for $100. Her cost is $80, her profit is $20. Find and circle the number 20.

1990s

An unenlightened logger cuts down a beautiful stand of 100 trees in
order to make a $20 profit. Write an essay explaining how you feel
about this as a way to make money. Topic for discussion: How did the
forest birds and squirrels feel?

Another Climate Rorschach Test

Error: Circular Reference

Les Miles will remain as coach of the LSU football team (at least for a while) despite being wooed by Michigan. (LSU must wonder what's wrong with their coaching job - they have won two national championships this decade but can't get a coach to stay).

Should Miles win the BCS championship [ed: which he now has accomplished] his contract states he has to be
among the top three paid college coaches in the nation, which would
bump him to the $3.5 million range.

This is not uncommon language now in sports contracts. For example, players with a franchise tag in the NFL must get a salary equal to or greater than the average of the top five players at that position.

So here is my question. What happens if three other college coaches, say Pete Carrol, Jim Tressel, and Urban Meyer (who have all won national championships in the last 10 years) were to demand that they too should be guaranteed a salary that puts them in the top three coaches? Don't things start getting real recursive at this point?Postscript: Yeah, I know, the language generally says they get bumped to a top X position on the day of a certain event, like winning the BCS or having the franchise tag applied, which circumvents the circularity problem, mostly, by not being an open-ended reset. It is still funny to think about. There is nothing to stop 4 coaches from negotiating a clause with an open-ended reset such that their salaries would spiral to infinity. Even Solomon might struggle with that one when it went to court, though the Gordian Knot solution would be to just run one of the four through with a sword.

I wonder if this has ever happened, say with two CEO's that had contracts that guaranteed that each would, at any given time, be the highest paid CEO in the Fortune 500.

Uncovering Some Really Bad Science

Kevin Drum thinks he has a killer analysis supporting government health care. In a post he titles sarcastically "Best Healthcare In the World, Baby," Drum shares this chart:

The implication is that the US has the worst healthcare system, because, according to this study, the US has the highest rates of "amenable mortality," defined as deaths that are "potentially preventable with timely and effective health care."

I get caught from time to time linking to studies that turn out to have crappy methodology. However, I do try to do a little due diligence each time to at least look at their approach, particularly when the authors are claiming to measure something so non-objective as mortality that was "potentially preventable."

So, when in doubt, let's look at what the author's have to say about their methodology. The press release is here, which gets us nowhere. From there, though, one can link to here and then download the article from Health Affairs via pdf (the site is gated but I found that if you go through the press release site you can get in for free).

The wording of the study and the chart as quoted by Mr. Drum seem to imply that someone has gone through a sampling of medical histories to look at deaths to decide if they were preventable deaths. Some studies like this have been conducted. This is not one of them. The authors do not look at any patient data.

Here is what they actually did: They arbitrarily defined a handful of conditions as "amenable" to care. These are:

All the study does is show how many people died in each country from this set of diseases and conditions. Period. It doesn't determine if they got care or if they in particular could have been saved, but just that they died of one of the above list of conditions. This study was not an effort to identify people who died when their particular condition should have been preventable or amenable to care; all it measures is the number of people in each country who died from list of conditions. If Joe is talking to me and in the next second flops over instantly dead of a massive heart attack, the author's consider him to have died of a disease amenable to care.

We can learn something by looking at the breakdown of the data. If you can't read the table below, click on it for a larger version

Let's take the data for men. The study makes a big point of saying that France is much better than the US, so we will use those two countries. In 2003, France has an "amenable disease" death rate 56 points lower than the US. But we can see that almost this whole gap, or 42 points of it, comes from heart and circulatory diseases. The incidence of these diseases are highly related to diet and lifestyle. In fact, it is well established that the US has a comparatively high incidence rate of these diseases, much higher than France. This makes it entirely possible that this mortality difference is entirely due to lifestyle differences and disease incidence rates rather than the relative merits of health care systems. In fact, this study is close to meaningless. If they really wanted to make a point about the quality of health care systems, they would compare them on relative mortality with a denominator of the disease incidence rate, not a denominator of total population.

But in their discussion, the study's authors reveal themselves to be, if I am reading them right, complete idiots in terms of statistical methods. The authors acknowledge that lifestyle differences may be a problem in their data. This is how they say they solved this problem:

It is important to recognize that the development of any list of indicators of amenable mortality involves a degree of judgment, as a death from any cause is typically the final event in a complex chain of processes that include issues related to underlying social and economic factors, lifestyles, and preventive and curative health care. As a consequence, interpretation of findings requires an understanding of the natural history and scope for prevention and treatment of the condition in question. Thus, in the case of IHD, we find accumulating evidence that suggests that advances in health care have contributed to declining mortality from this condition in many countries, yet it is equally clear that large international differences in mortality predated the advent of effective health care, reflecting factors such as diet and rates of smoking and physical activity.16 To account for this variation, we included only half of the mortality from IHD, although, based on the available evidence, figures between, say, 25 percent and 70 percent would be equally justifiable.

I have a very smart reader group, so my sense is that many of you already see the gaffe here. The author's posit that 50% of heart disease may be due to lifestyle, though the number might be higher or lower. So to correct for this, they reduce every country's heart disease number (IHD) by a fixed amount of 50%. WTF?? This corrects for NOTHING. All this does is reduce the weighting of IHD in the total measure.

Look, if the problem is that lifestyle contribution to heart disease varies by country, then the percentage of IHD deaths that need to be removed because the deaths are lifestyle related will vary by country. If the US has the "worst" lifestyle, and the number for lifestyle deaths is about 50% there, it is going to be less than 50% in every country. The correction, if an accurate one could be created, needs to be applied to the variance between nations, not to the base numbers. Careful multiple regressions might or might not have sorted the two sets of causes apart, but dividing by 50% doesn't do anything. This mistake is not just wrong, it is LAUGHABLE, and calls into question the author's qualification to say anything on this topic. They may be fine doctors, but they don't know squat about data analysis.

There may be nuggets of concern for the US lurking in this data. I don't know how they measure deaths from surgical conditions and medical errors, but its not good to be higher on this. Though again, you have to be careful. The US has far more surgeries than most other countries per capita, so we have more surgical deaths. Also, medical error data is notoriously difficult to compare country to country because reporting standards and processes are so different. In the US, when the government measures medical errors, it is a neutral third party to the error. In Europe, the government, as healthcare provider, is often the source of the error, calling into question how aggressive these countries may be in defining "an error." Infant mortality data is a good example of such a trap. The US often looks worse than European nations on infant mortality because it is defined as infant deaths as a percentage of live births. But the US has the most advanced neo-natal capabilities in the world. Many pregnancies that would result in a "born dead" in other countries result in a live birth in the US. Since these rescued births are much more problematic, their death rate is much higher.

There is good news for the US in the study. The item on this list most amenable to intensive medical intervention is cancer (neoplasms in the study above). In that category, despite a higher incidence rate than many of these countries, the US has one of the lowest mortality rates as a percentage of the total population, which implies that our cancer mortality in the US as a percentage of cancer incidence is much better than these countries. This shows our much higher 5-year cancer survival rates.

Update: I thought this was pretty clear, but some of the commenters are confused. The halving of IHD numbers was applied to all countries, not just the US. So the actual male US IHD number is about 100 before halving and the actual French number is about 40. Again, this halving only reduces the weighting of IHD in the total index; it in no way corrects for differences in incidence rate.

Worst Fears Realized

Frequent readers will know that unlike most other libertarian blogs, I have not plastered the site with hopeful articles and endorsements for Ron Paul. I have always been 99% supportive of his work in Congress and was happy to have him there. But I resisted even registering in the Arizona primary to vote for him. Arizona requires that to vote in a primary, I have to register as belonging to that party, and I am just not going to do that.

Part of my reluctance to jump on the bandwagon has been my general disaffection with politics and some ambivalence as to whether my elected overlord is from Coke or Pepsi. The rest, I think, was a subliminal fear of supporting any Libertarian candidate because they always seem to turn out to be wing-nuts. QED.

Update: The excuse that he didn't know what was in a series of ghost-written newsletters is just ridiculous. I will accept that excuse for one issue, a mistake in selecting partners (I am sure there are bloggers out there who regret guest-blogger selections) but a long series of newsletters implies tacit approval or at least acceptance.

The European Commission is considering proposing a
carbon dioxide tariff on imports from states failing to tackle
greenhouse gas emissions, while also considering a toughening-up of the
EU's own emission trading system....

The plan reflects pressure by French president Nicolas Sarkozy who
argued in October that Europe should "examine the option of taxing
products imported from countries that do not respect the Kyoto
Protocol," referring to the 1997 international agreement on fighting
climate change.

Mr Sarkozy urged Brussels to discuss the implications of "unfair
competition" by firms outside the EU, which do not have to abide by
strict European standards on CO2 emissions.

Hillary Clinton needs a
language lesson. She favors only trade that is found by government to
"benefit[] our workers and our economy" and that promotes "rising
standards of living across the world" ("Full Transcript: Hillary Clinton Interview," December 3; my emphasis). She then asserts that "There is nothing
protectionist about this."

Oh please.

Protectionism
exists whenever, wherever, and whyever government artificially raises
its citizens' costs of buying imports. Protectionism has forever
rested on the false notion that government officials know best how
consumers should spend their money. And it attempts today to hide its
ugly face behind the smiling mask of allegedly noble intentions, such
as those mouthed by Sen. Clinton.

The title of his post is "The Moment Somone Must Explain that He or She Isn't a Protectionist, You Can Bank on that Person Being a Protectionist."

Subsidize Biofuels, Destroy the Rainforest

Not much comment necessary for the following, except to say that I don't think one should be able to call this an unintended consequence of US biofuel and corn subsidies when 1) the results are utterly predictable and 2) folks like myself publicly predicted it.

The US is the world's leading producer of soy, but many American soy
farmers are shifting to corn to qualify for the government subsidies.
Since 2006, US corn production rose 19% while soy farming fell by 15%.

The
drop-off in US soy has helped to drive a major increase in global soy
prices, which have nearly doubled in the last 14 months. In Brazil, the
world's second-largest soy producer, high soy prices are having a
serious impact on the Amazon rainforest and tropical savannas.

"Amazon
fires and forest destruction have spiked over the last several months,
especially in the main soy-producing states in Brazil," said Laurance.
"Just about everyone there attributes this to rising soy and beef
prices."

High soy prices affect the Amazon in several ways. Some
forests are cleared for soy farms. Farmers also buy and convert many
cattle ranches into soy farms, effectively pushing the ranchers further
into the Amazonian frontier. Finally, wealthy soy farmers are lobbying
for major new Amazon highways to transport their soybeans to market,
and this is increasing access to forests for loggers and land
speculators.

Campground Bleg

Sorry, this is work-related, but we are considering bidding on the management of campgrounds on Lake Merwin, Yale Lake, and Swift Reservoir near Mt. St. Helens in WA. Since these facilities are under a lot of snow, I won't be able to get a good feel for them. Anyone out there familiar with these facilities? If so, I would love an email or comment post about them, good or bad.

Time to Move on From Blaming Thimerosal

Kevin Drum observes that yet another study has put to rest the theory that Thimerosal, a preservative that used to be put in some childhood vaccines, causes autism:

However, despite the equivocal (at best) scientific evidence linking
thimerosal to autism, conspiracy theories abounded and the issue deeply
split the autism community. Firm evidence in one direction or the
other, though, had to wait until now. Thimerosal was ordered removed
from most childhood vaccines in 1999, and by the early 2000s children
had stopped receiving virtually all thimerosal-based vaccines. If
autism rates then decreased, it would be good evidence that thimerosal
really had been to blame.

But that didn't happen. Interim studies have shown no decrease in
autism rates, and a study released today puts the nail in the coffin of
the thimerosal story. It tracks children born in California and
includes enough years of data to show pretty definitively that autism
diagnoses continued to rise even after thimerosal was removed

I thought it was time to move on from this theory years ago, but Drum says that it continues to be carried forward by parents desperate to find an explanation for their child's autism. I guess I am a bit more cynical, for I would argue that this bad science of Thimerosal has been carried forward, just like the bad science of breast implant caused immune deficiencies, by trial lawyers desperate for another easy extortion target. And, just as medical studies did not stop lawyers from pressing forward implant lawsuits, I am sure the Thimerosal lawsuits are not going to go away either.

What Happens When You Abandon The Price Mechanism to Allocate Resources

When the government does not allow prices to float in real time in response to changes in supply and demand, then gluts and shortages are inevitable. When shortages occur, due to prices that are capped or not allowed to move upwards sufficiently quickly, queues and/or spot shortages occur. When the government decides it does not like this, the jack-booted thugs step in and we have government-enforced rationing. California, famous for its stupidity in letting wholesale electricity prices float while capping retail prices and thus creating an economic disaster several years ago, is at it again in the electricity market:

What should be controversial in the proposed revisions to Title 24 is
the requirement for what is called a "programmable communicating
thermostat" or PCT. Every new home and every change to existing homes’
central heating and air conditioning systems will required to be fitted
with a PCT beginning next year following the issuance of the revision.
Each PCT will be fitted with a "non-removable " FM receiver that will
allow the power authorities to increase your air conditioning
temperature setpoint or decrease your heater temperature setpoint to
any value they chose. During "price events" those changes are limited
to /- four degrees F and you would be able to manually override the
changes. During "emergency events" the new setpoints can be whatever
the power authority desires and you would not be able to alter them.

In
other words, the temperature of your home will no longer be yours to
control. Your desires and needs can and will be overridden by the state
of California through its public and private utility organizations. All
this is for the common good, of course.

I can't think of anything that better illustrates the tie between free exchange and freedom. And by the way, how long before the greenies in the legislature suggest using this mechanism even when there are not shortages to turn down everyone's air conditioner, just because they can.

Update: Exercise for the reader -- Figure out how, once this policy goes bad, the state of California will again blame Enron for their failure.

Staggering Arrogance

After years of secret preparation, the world's cheapest car will be unveiled in Delhi this week...At 100,000 rupees (£1,290), the People's Car, designed and
manufactured by Tata, is being marketed as a safer way of travelling
for those who until now have had to transport their families balanced
on the back of their motorbikes.

Ratan Tata, 70, chairman of the
family-run business, who has spearheaded the race for a cut-price car,
wrote on the company website: 'That's what drove me - a man on a
two-wheeler with a child standing in front, his wife sitting behind,
add to that the wet roads - a family in potential danger.'

But Tata hopes also to create a 'new market for cars which does not
exist', making them accessible to India's booming middle classes made
recently rich by an economy growing at around 9 per cent a year. ...

Last
year just over one million cars and seven million motorbikes were sold
in India. Tata wants to transform some of those motorbike buyers into
car owners and believes that the company can eventually sell up to a
million People's Cars a year. Analysts say the project could
revolutionise car prices, not just in India, but globally. Several
other manufacturers have similar products in the pipeline.

Awesome. This is a story about three quarters of a billion people who have lived in poverty, well, forever, starting to join the middle class.

But many environmentalists, about 100% of whom I would venture to say own a car themselves, oppose this transition to prosperity:

'There is this mad rush towards lowering the prices to achieve mass
affordability,' said Anumita Roychoudhury, of the Centre for Science
and Environment in Delhi. 'If vehicle ownership increases very rapidly,
we'll have a time bomb ticking away. When you lower the price that
drastically, how will you be able to meet the safety and emissions
standards? There are no clear answers yet.'

I would challenge this person to design a car that doesn't crash test better than a motorbike. This is just incredible arrogance, attempting to deny millions of people the prosperity which western environmentalists already share. (via Maggies Farm)

Postscript: The fact is that environmental quality in every developing nation tends to follow a J-curve. Early stage development tends to muck things up a bit (think air quality in 1018th century Pittsburg or in China today) but things improve as people get wealthier. Places like China and India are in some of the lowest reaches of that J-curve. Attempting to freeze their development in place not only arrogantly denies these folks prosperity, but also cuts off future environmental gains that come with wealth.

The Libertarian Foreign Policy Problem

Outside of trade policy and climate treaties, I very seldom discuss foreign policy. First, because it is not my first interest. Second, because I am not an expert and do not spend the time to keep myself sufficiently informed on the issues to have useful insights. Third, because of exactly this problem stated so well my Megan McArdle:

I periodically flirt with isolationism, or if you prefer,
"non-intervention". Like most libertarians, I'm attracted to "high
concept" political philosophy: simple rules that can be stated in a
sentence or less. No arguments about causus belli, blowback, or
ultimately unknowable political ramifications; just a simple "yes or
no" test. Did a foreign army invade the United States? For "Yes", press
one; for "No", press two, and go back to arguing about what should
replace child welfare laws in the coming anarcho-capitalist society.

Besides, all the foreigners hate having us there. Why not leave, and
see if absence makes the heart grow fonder? (I suspect that many
nations which have come, over long decades, to regard regional peace as
some sort of natural law, will get a rather nasty surprise. This might
make our influence look, in retrospect, rather appealing.)

But anyone who thinks at all seriously about libertarianism will,
fairly early on, be faced with a very high hurdle. There are a handful
of wars in which American intervention unambiguously halted gross
abuses of human liberty. World War II is one, though many end up going
around, rather than over . . . arguing that the Nazis were the direct
result of American intervention in World War I; or that it was
justified because Japan attacked us1; or that Russia and Britain would have defeated Hitler anyway2. The American Civil War, however, is by far the highest leap; and the hardest to dodge.

In theory, every state has the right to secede, and the stated
Federal rationale for the Civil War--preserving the union--was the
vilest tyranny. In practice, chattel slavery was a barbarism even
viler.

And so we killed 20-30% of the Confederate Army, not a few of our
own, and uncounted numbers of civilians. That's not counting the
wounded, who probably outnumbered the dead. All we managed to achieve,
at this horrendous cost, was a corrupt and brutal occupation, followed
by the "freedom" of Jim Crow, sharecropping, and "separate but equal". And it was worth it.
The good guys won. We didn't do everything we wanted to, or even
everything we could have, or should have. Jim Crow was putrid. But it
was nonetheless so much better than slavery that it was worth the
horrendous cost--in my opinion, and that of almost everyone in the
world.

For me, a big part of the problem is one of information -- generally, most of the information one might find useful in deciding if X is a good war to pursue is from the government, an institution that demonstrably cannot be trusted based on past history when it makes this case. Non-interventionism seems the right way to go, except for the
(relatively few) times it is not. The problems is, to paraphrase the
famous dictum about advertising money, "half (or more) of our wars are
a waste -- we just don't know in advance which half." Megan uses the
example of the Civil War, saying that that war was worth it because we
got rid of slavery. But the war by no means began that way. It wasn't
really until well into the war that both sides were pretty much in
agreement that the war was about ending or retaining slavery. I would argue that in advance, that war looked like an awful, terrible, horrible proposition. The initial value proposition was "let's go to war so the Feds can have a bigger empire to run." Only later did it become, "let's go to war to free a large part of our population." There was a female professor, I forget her name, who made the point that the Emancipation Proclamation changed the war from a bloody waste of time to a moral positive. But that came years into the fight.

The other problem I have is that the war is fought by, well, the government, the institution for which I have no trust. One way of thinking about it is that every time we go to war, we put our lives and treasure and very future as a country in the hands of the Post Office. Eeek.

Using Copyright Law to Block Price Arbitrage

Movie producers sell DVDs cheaper in, say, Taiwan than they do in the US. This is not an unheard of economic phenomenon -- it happens in every commodity and product. The reason we don't notice these price differences too much is that traders and arbitragers and shipping companies will target the largest price differentials and take advantage of them by buying and shifting products around until the price differential is less than the transportation and transaction costs. Basic economics.

However, despite a number of structural advantages that already serve to reduce this cross-flow (e.g. different languages), the media companies are trying to stretch copyright law far beyond what CopyOwner says is legally defensible:

Copyright owners (including the owners of the “works” embodied in
the copyrighted labels on common non-copyrighted goods) like to
discriminate in pricing by creating artificial markets so that
discounts in one market won’t be resold at a lower price in over-priced
markets. The thinking goes, “Why let U.S. consumers get the benefit of
prices that are affordable to people in developing countries when we
know we can get more out of the U.S. consumer’s pocket?”

The
“first sale doctrine,” now codified as Section 109 of the Copyright
Act, makes clear that the copyright owner’s right of distribution is
subject to the copy owner’s right to sell it to anyone, anywhere, at
any price. And that’s great policy. Entrepreneurs who see too big a gap
between the prices charged U.S. consumers and the prices charged
consumers elsewhere for identical copies can buy the cheaper product
and sell it at a profit, while still giving the U.S. consumer a better
bargain.

But that’s not why I nearly fell out of my chair. I
was used to these anti-competitive price discriminators ranting about
perfectly lawful gray market goods. What this story does is label these
perfectly legal importers as pirates. That’s right. Despite quoting the
Supreme Court in Quality King Distributors v. L’anza Research International,
that “once the copyright owner places a copyrighted item in the stream
of commerce by selling it, he has exhausted his exclusive statutory
right to control its distribution,” a ruling that suggests that the
evildoers are those who try to circumvent the law by preventing gray
market imports, they go on to call the importers “pirates”

Big Round Number

It is always amazing how big round numbers hold the media in thrall. Last week we saw the inevitable spate of articles about oil crossing the $100 mark, if only for a few minutes of trading (actually, the more interesting milestone was somewhere back in the low $90 range when we exceeded the highest past price for oil in inflation-adjusted dollars).

I don't get hugely worked up about gradual commodity price changes. Oil price increases are signals, signaling marginal consumers to use less and suppliers with historically marginal sources and substitutes to consider their development. Also, our economic dependence on oil per dollar of GDP has declined, meaning that $100 oil has less impact on the economy than, say, it would have 20 years ago:

I would certainly prefer lower oil prices, and my business suffers to some extent when gas prices rise, but it is not a disaster (it is interesting that higher oil prices are considered bad in the media, while lower home prices are considered bad in the media). I know from past experience in the oil patch that oil price bubbles are often followed by oil price drops. The high oil prices of the seventies were followed by rock-bottom oil prices in the eighties, and subsequent recession in the oil patch (causing the housing bust I discussed here).

Also, given how we got to these higher oil prices, I tend to take them as good news. Oil prices are not rising due to some drop off in supply. Instead, they are rising because of a strong global economy, in particular with millions of people entering the middle class in Asia. This is GOOD news.

I have written on peak oil a bunch, so I won't get into it again. Oil production at worst is going to flatten out for a long time, meaning we will have a steady rise in oil prices over time as the economy grows. If you want a third party evaluation of peak oil theory, go ask climate catastrophists who believe that CO2 production is an impending disaster for the economy. These guys know that there are lots of unproduced hydrocarbons out there, and it terrifies them. Al Gore and James Hansen were running around last week trying to close off Canadian tar sands from development.

Finally, after this series of random thoughts, one more interesting take on this via Megan McArdle: $100 oil was a stunt

Some observers questioned the validity of the price mark when it
emerged that the peak was the result of a trader – one of the “locals”
who trade on their own money – buying from a colleague just 1,000
barrels of crude, the minimum allowed, industry insiders said. The deal
on the floor of the New York Mercantile Exchange was at a hefty premium
to prevailing prices.

Insiders named the trader as Richard Arens, who runs a brokerage
called ABS. He was not available for comment. Analysts said he may have
been testing the ceiling of the crude price, but the premium he paid
surprised the market.

Before the $100-a-barrel trade, oil prices on Globex were at $99.53
a barrel. Immediately after the trade, prices went down to about
$99.40, suggesting a trading loss of $600 for Mr Arens.

Stephen Schork, a former Nymex floor trader and editor of the
oil-market Schork Report, commented: “A local trader just spent about
$600 in a trading loss to buy the right to tell his grandchildren he
was the one who did it. Probably he is framing right now the print
reflecting the trade.”

Once trees hit their maturity, their growth slows and therefore the
rate they sequester CO2 slows. At this point, we need to be cutting
more down, not less, and burying them in the ground, either as logs or
paper or whatever. Just growing forests is not enough, because old
trees fall over and rot and give up their carbon as CO2. We have to
bury them. Right?

Here a carbon sequestration strategy is proposed in which certain dead
or live trees are harvested via collection or selective cutting, then
buried in trenches or stowed away in above-ground shelters. The largely
anaerobic condition under a sufficiently thick layer of soil will
prevent the decomposition of the buried wood. Because a large flux of
CO2 is constantly being assimilated into the worldas forests via
photosynthesis, cutting off its return pathway to the atmosphere forms
an effective carbon sink....

Based on data from North American logging industry, the cost for wood
burial is estimated to be $14/tCO2 ($50/tC), lower than the typical
cost for power plant CO2 capture with geological storage. The cost for
carbon sequestration with wood burial is low because CO2 is removed
from the atmosphere by the natural process of photosynthesis at little
cost. The technique is low tech, distributed, easy to monitor, safe,
and reversible, thus an attractive option for large-scale
implementation in a world-wide carbon market

I Wonder if Book Stores Have Tried This?

…Strange as it sounds, the best way to boost sales at your
independently owned coffeehouse may just be to have Starbucks move in
next-door.

That’s certainly how it worked out for Hyman. Soon after
declining Starbucks’s buyout offer, Hyman received the expected news
that the company was opening up next to one of his stores. But instead
of panicking, he decided to call his friend Jim Stewart, founder of the
Seattle’s Best Coffee chain, to find out what really happens when a
Starbucks opens nearby. “You’re going to love it,” Stewart reported.
“They’ll do all of your marketing for you, and your sales will soar.”
The prediction came true: Each new Starbucks store created a local
buzz, drawing new converts to the latte-drinking fold. When the lines
at Starbucks grew beyond the point of reason, these converts started
venturing out - and, Look! There was another coffeehouse right
next-door!

One wonders if smaller niche book stores, who complain about Borders and Barnes & Noble, have had any similar experiences.

As to the part about "When the lines
at Starbucks grew beyond the point of reason," I can say from my limited observations as a non-coffee drinker that there are a lot of things wrong with the Starbuck's model, particularly vis a vis lines. First and foremost seems to be that their production process doesn't make a lick of sense. I'd have been laughed out of the room in almost any operations course if I had proposed the production process they use to deliver coffees. At some point, people are going to realize that waiting in lines does not have to be part of the coffee experience, and then Starbucks is in trouble.

For years, the Einstein's Bagels near me had the worst production process I had ever seen. People had to criss-cross one another constantly behind the counter just to complete one order, and the assembly line, from ordering through payment, always had a horrible bottleneck somewhere, thought the bottleneck moved around as they played with staffing. Every Saturday morning the line and wait would be awful. I pretty much had given up on them when they suddenly closed for three weeks. When they reopened, they had a new layout behind the counter, new electronics, and a whole new process. Since then, I have never seen a line longer than 2 people even in peak periods. And look at Southwest Airlines. They have reinvented their boarding process for about the third time (and I like the changes). Is it really possible that no one at Starbucks has thought about re-engineering the coffee delivery process?

Six Inches from Being Steve Bartman

Today I had to make my usual Sunday morning run to the hardware store to get ... something or other, I can't remember. Anyway, as I was leaving, I looked behind be, saw no one there, and started backing up. I have one of those backup warning thingies that been when you are about to hit something, and suddenly the things starts screaming at me, and I jam on the brakes. There, cutting behind my car, is Randy Johnson, Diamondbacks pitcher and 27-time Cy Young winner. I seem to have missed his knee by about 6 inches. Gulp.

By the way, if you think Johnson looks creepy on the mound, you should see him flashing a searing FU look. This event effectively adds to my long history as scourge-to-the-stars, wherein I have stepped on Raul Julia's foot, spilled a big Gulp size diet coke on Brook Shields, added a big ink stain to Farrah Fawcett's blouse, hit Martina Navratilova in the face with a revolving door, and, uh, others I might share if my mom did not read this blog.

So why aren't as many farmers growing hops and barley? Because the government is paying them ridiculous jack to grow corn so we can burn food into our cars:

Papazian attributed the barley prices to ethanol subsidies that have
raised the price of corn, the main ingredient in the alternative fuel.
As a result, farmers have switched to barley for livestock feed, which
has pushed up prices.

The hops situation is more complex. Years of overproduction and low
prices led farmers to replace hops fields with more profitable crops.
Add to that corn subsidies that have caused farmers to replace hops
fields with corn, a drought in Australia that affected yields and heavy
rains in Europe that ruined much of this year's crop.

Good Old Microsoft

I tried to open a complicated Excel file today and Excel told me that it was corrupted and that it would try to rebuild it. Having tried to rebuild it, Excel reported the file was beyond repair. Now I have a backup somewhere, but I tried an experiment. I fired up the Open Office freeware clone of Excel (I think it is called Calc). It opened the Excel file that Excel itself could not open or rebuild. I re-saved the file using Open Office and now all is working fine and Excel can now read the worksheet again. The $0 clone succeeds where the $400 original fails.

Lost Some Points with My Wife

Last night I was working at my office up until about 1AM (that's something we of the exploitive class small business owners have to do from time to time) and as I was leaving I went around the back to the dumpster to throw some trash away. The top was closed, and the lid is really large such that you have to really throw it upwards to get it to stay open. Well, unfortunately, I had my car key in my hand and it went sailing through the air too.

So, with it pitch black and the key likely inside the dumpster somewhere, I was forced to call my wife, wake her up, and ask her mysteriously to meet me at my office with a flashlight and my spare car key. She came through, and did it with pretty good humor, all things considered. By the way, after a few minutes of dumpster diving with the flashlight, I found my key and everything turned out fine, though a late night shower was required before bed.

Tragically, it is not even close to the dumbest thing I have ever done in my life. Probably not even in the top twenty.

Housing: Not At The Bottom

Here is a public service announcement for those of you who might be younger or who did not live through past housing bubbles (such as the mid-80's bubble in Texas). Housing bubbles take a long time to sort out. The typical pattern is that one sees a big build-up of yard "For Sale" signs around town, but no real movement or sales. What happens is that people selling their houses resist accepting that a change in pricing levels has occurred, and list the homes at the old, higher price levels, particularly when any price cuts would put them underwater on their mortgage.

Eventually, the dam breaks, as sellers are forced to accept lower pricing because they can no longer bear the holding costs any longer. In Texas, I had at least two friends who just left the keys in the mailbox and walked away, leaving it all to the bank to sort out. But it can take a really long time for this to play out -- I am talking years, not months, depending on how inflated the bubble got. From my experience (confirmed in the futures markets here) the bottom will not come until at least a year from now. In Texas in the 1980's, it took as long as five years for the whole thing to play out and for prices to start recovering.

The Catastrophe Stems Completely From Feedback

Over at Climate Skeptic, I dissect climate models to show that the future warming in the models from CO2 alone is not much more than 0.5C. All the catastrophe comes from positive feedbacks that modelers assume dominate the climate, an odd assumption for such a long-term stable system. I summarize as follows:

Climate sensitivity is the temperature increase we might expect with a doubling of CO2 to 560 ppm from a pre-industrial 280ppm

Nearly every forecast you have ever seen assumes the
effect of CO2 alone is about a 1C warming from this doubling. Clearly,
though, you have seen higher forecasts. All of the "extra" warming in
these forecasts come from positive feedback. So a sensitivity of 3C
would be made up of 1C from CO2 directly that is tripled by positive
feedbacks. A sensitivity of 6 or 8 still starts with the same 1C but
has even higher feedbacks

Most thoughtful climate scientists will admit that
we don't know what these feedbacks are -- in so many words, modelers
are essentially guessing. Climate scientists don't even know the sign
(positive or negative) much less the magnitude. In most physical
sciences, upon meeting such an unknown system that has been long-term
stable, scientists will assume neutral to negative feedback. Climate
scientists are the exception -- almost all their models assume strong
positive feedback.

Climate scientists point to studies of ice cores and
such that serve as proxies for climate hundreds of thousands of years
ago to justify positive feedbacks. But for the period of history we
have the best data, ie the last 120 years, actual CO2 and measured
temperature changes imply a sensitivity net of feedbacks closer to 1C,
about what a reasonable person would assume from a stable process not
dominated by positive feedbacks.

On Political Calibration

If I had to choose one word that describes why I despair of politics, it is "calibration." Recently, it has been observed that Ron Paul, for example, cannot possibly win because he sticks to a basic set of beliefs and never calibrates his message to the electorate and recent polls. On the other end of the scale, Hillary Clinton is famous for endlessly calibrating everything she does in the hopes of maximizing the votes she receives.

Calibration is one of those dangerous words that tend to obfuscate the underlying reality. Because, there are only two possible definitions of calibration as used in this political context:

Lying, i.e. telling the electorate what they want to hear with the intention of acting differently once in office

Total nihilism,, i.e. willingness to shift beliefs based on whatever is effective

But there is little difference between Republican and Democratic
Presidents in what they actually do. In what they say? Sure. Both
Reagan and Bush talk about individual responsibility and the market
blah blah blah. Bill Clinton talked more about feeling people's pain
and the downtrodden blah blah blah. Similarly, in the current
presidential campaign, there are stark rhetorical differences between
say Giuliani and Romney on the one hand and Obama and Clinton on the
other.

But will the actual results be different? Will Hillary double the
minimum wage? Change our health care system to be more socialized?
Eliminate corporate welfare? Will Giuliani make the health care system
less socialized? Eliminate the minimum wage? Get rid of farm subsidies?
Stop spending federal money on education?

Most of it is talk and it's not just because change is hard to
achieve. It's because they really don't want change. Did Bill Clinton
get rid of income inequality? Dent it? The share of income going to the
top 1% rose throughout most of the Clinton administration. Was it his
policies? The steady rise in the share of income going to the top 1%
started rising in 1976. Was it Carter's doing?

Was Bush or Reagan a hard core free trader in practice? Nope. They
used protectionism when it was politically expedient. Just like Bill
Clinton signed welfare reform and NAFTA and then chose not to enforce
the truck provision of NAFTA because the Teamsters didn't like it.

Government gets bigger under both Republicans and Democrats. What
they spend money on is a little different, yes. But to hate George Bush
for being a free market guy is to miss what is really going on. And to
hate Hillary because she doesn't understand the power of markets and to
love, say, Mitt Romney, is to misunderstand both of them. They use
rhetoric to dupe you. Don't be duped.

Paul Krugman worries that,
although trade between high-wage countries is mutually beneficial,
"trade between countries at very different levels of economic
development tends to create large classes of losers as well as winners"
- and so is suspect because it likely harms ordinary American workers
("Trouble With Trade,” December 28).

A famous trade economist
argues that this concern is misplaced. In a 1996 essay, this economist
- responding to a protectionist who fretted that western trade with
low-wage countries would harm workers in the west - wrote that this
protectionist "offers us no more than the classic 'pauper labor'
fallacy, the fallacy that Ricardo dealt with when he first stated the
idea, and which is a staple of even first-year courses in economics. In
fact, one never teaches the Ricardian model without emphasizing
precisely the way that model refutes the claim that competition from
low-wage countries is necessarily a bad thing, that it shows how trade
can be mutually beneficial regardless of differences in wage rates."

It is Time To Reform the US Patent Office

The evidence is fairly clear that it is past time to reform the US Patent Office, particularly in its handling of software and Internet-related patents. One of my ex-employers, Mercata, managed to obtain several patents (including a few that were awarded postmortem) that in effect patented volume discounting (though the method was sortof kindof clever). Amazon famously managed to patent 1-click ordering, and numerous companies from Red Hat to Blackberry have been subject to expensive suits from various patent trolls, many of whom never took a single step to monetizing or developing their patents besides hiring lawyers.

Stephan Kinsella at Mises has another good example: Apple is attempting to patent the ordering of take-out food by cell phone.

Genius! Apple's done it! They've solved the problem of waiting in line for food or beverages. You place your order before you get it--but not the normal way--see, here's the pure genius of it--you place your order, get this, you won't believe it, wirelessly.
Yep! Who would have thunk it? I mean, I know it's well known to call in
a food order and drive there in time to get it, so you don't have to
wait in line (and this might be done on a (wireless) cordless home
phone, or a (wireless) cell phone, but I digress); or to place your
order and receive one of those little blinky-buzzy things that tells
you when your order is ready, so you don't have to wait in line (hey,
aren't those little blinky wireless buzzers, er, wireless? but again, I
digress); and it's known to communicate wirelessly; and in other
countries, it's well-known to use cell phones to make purchases. And in
McDonald's, you can place your order at a little automated computer
kiosk (but maybe it uses wires! Whew--HUGE difference, lemme tellya).

But, my God, Apple! Oh, it's amazing--the innovative brilliance to think of using a cell phone--a cell phone,
do you hear me!?--to place an order for a cuppajoe... so you don't have
to stand in line... it's so beautiful, I'm about to shed tears...
Sniff... Thank God for the US patent system giving them a king's
monopoly on this unique idea. Otherwise, no one would have come up with
this!. And let's only hope Apple gets a patent on this and is able to
sue or threaten other companies to pay them royalties for all their
remotely similar "wireless communications systems". After all, it's a small price to pay to have the American innovation we do.

There was a time when I was naive enough to think that the US Patent Office would step back and say -- "oops, we screwed up. We really didn't know what we were doing when we were flooded with all of these business-model-masquerading-as-software patents. Now we realize we need to get our act together." Congress is going to have to step in and reduce or eliminate the patentability of software and business models (all other software other than computer code is subject copyright law, not patents).

But of course, Congress will never make these reforms, because forcing business competition into the courts under arbitrary and changing law rather than settling business model superiority in the marketplace generates far more political activism and campaign donations. So why am I even bothering writing this. Never mind.

Postscript: By the way, if I were running a software or Internet company, I would be filing every dumb patent application I could think of, because if I don't, someone else will and will and then I am stuck with a suit and trying to prove priority. Which causes me to think of one way we might force reform -- a sort of reverse strike. Every software company in 2008 should strive to file as many patent applications for every BS thing they can think of. Maybe a deluged PTO might at that point force some kind of reform.

The Public Interest is One Guy

TJIC has a disgusting story of the state legislature passing a law just to bail out one guy who could not do well on his civil service tests but had friends in high places, vaulting him from 623 to 1 on the waiting list (if only I could get the same law for me and security lines at airports).

Now, it is always possible to find anecdotes of government patronage, but I thought this quote from the Boston Globe about the extent of such help-one-person laws was incredible:

A Globe review found that 40 of the 218 state laws passed in 2007
provide benefits to specific individuals by name. Thirty allowed
employees of certain state agencies to donate sick days to particular
colleagues, and three granted retirement benefits to certain public
employees. Six exempted particular police and firefighter applicants
from maximum age requirements, allowing them to take civil service
tests and apply for municipal jobs at an older age.

If each of these is a worthy goal, then change the law to allow everyone to do it, not just your pals.

It's More Expensive, but Makes Up For It By Being Less Flexible

I have chastisedourcity on many occasions (more here) for spending enormous amounts of money on a new light rail / streetcar system for Phoenix. These light rail systems can be twenty or more times as expensive, per mile or passenger carried, than a similar bus system. But what really, really makes light rail nuts for Phoenix is the lack of flexibility. Our hugely expensive new light rail system serves just one corridor, in a city that really does not even have a downtown. Phoenix is characterized by a nearly infinite number of commuting routes that don't overlay nicely on a suburbs to city-center pattern as they might in, say, Chicago. Further, the current route arguably follows the least congested route of any in the city!

The incremental cost of light rail over bus systems has been justified to us by our government overlords by economic development. The argument goes that light rail creates more business development along their routes than a bus system. Now, I am skeptical of this, given the region justified building a billion dollar stadium for the hapless Cardinals on the same justification (not to mention numerous subsidies of a couple of college bowl games that add little to an area that is going to get holiday tourists because of its climate whether there is a football game or not.

But what about Portland? Supposedly Portland light rail is the go-by which all we unplanned cities should emulate. But the Anti-Planner brings this helpful observation about Portland's experience with light rail and development:

Streetcar advocates often say that 7-mile-per-hour streetcars aren’t about transportation, they are about economic development.
But they expect the Department of Transportation to pay for them out of
highway user fees. Why didn’t they ask the Department of Housing and
Urban Development for the money?

Of course, the Antiplanner doesn’t believe
that streetcars catalyze economic development. Instead, they merely
catalyze more tax subsidies for economic development. Portland spent
$90 million on a streetcar line and $665 million on subsidies to
development — then credited the development to the streetcar line.
Yeah, right.

Wherein Coyote Beats Scientific American by Over A Year

...As with living organisms and ecosystems, the economy
looks designed—so just as humans naturally deduce the existence of a
top-down intelligent designer, humans also (understandably) infer that
a top-down government designer is needed in nearly every aspect of the
economy. But just as living organisms are shaped from the bottom up by
natural selection, the economy is molded from the bottom up by the
invisible hand.

So here is this week's message for the Left: Economics is a
science. Willful ignorance or emotional rejection of the well-known
precepts of this science is at least as bad as a fundamentalist
Christian's willful ignorance of evolution science (for which the Left
so often criticizes their opposition). In fact, economic
ignorance is much worse, since most people can come to perfectly valid
conclusions about most public policy issues with a flawed knowledge of
the origin of the species but no one can with a flawed understanding of
economics....

In fact, the more I think about it, the more economics and evolution are very similar. Both are sciences that are trying to describe the operation of very complex, bottom-up, self-organizing systems. And,
in both cases, there exist many people who refuse to believe such
complex and beautiful systems can really operate without top-down
control.

For example, certain people refuse to accept that homo sapiens could
have been created through unguided evolutionary systems, and insist
that some controlling authority must guide the process; we call these
folks advocates of Intelligent Design. Similarly, there are folks who
refuse to believe that unguided bottom-up processes can create
something so complex as our industrial economy or even a clearing price
for gasoline, and insist that a top-down authority is needed to run the
process; we call these folks socialists.

It is interesting, then, given their similarity, that socialists and
intelligent design advocates tend to be on opposite sides of the
political spectrum. Their rejection of bottom-up order in favor of
top-down control is nearly identical.